Bitcoin (BTC) was closing in on the $46,000 key level Tuesday as bulls remained in the driver’s seat. In their latest report, analysts at crypto investment services firm Matrixport predicted that Bitcoin would hit $50,000 by the end of the week.
Why BTC Could Reach $50K This Week
Bitcoin shot up to a year-to-date high of over $45,800 today, and Matrixport thinks it will keep climbing well into the end of this week.
Matrixport, a cryptocurrency trading firm founded by Bitmain co-founder Wu Jihan, says the driver of the predicted rally is a confluence of factors. Matrix observed that the consolidation witnessed in the price of bitcoin towards the end of last year lays the foundation for a strong start to 2024. “After the typical mid-to-end December consolidation, Bitcoin is poised to break out on a robust beginning-of-the-year buying flow,” the comprehensive report says.
This is coupled with the anticipated greenlighting of spot bitcoin exchange-traded funds (ETFs) which could potentially be announced sooner than most crypto observers expect. “A potential bitcoin spot ETF approval could be announced today or tomorrow, ahead of most traders’ expectations for approval on January 8, 9, or 10,” said the crypto services provider.
ETFs are traded on stock exchanges and track the performance of an underlying asset. They are popular investment vehicles as they are inexpensive to trade and allow investors to gain exposure to digital coins without the hassle of storing the underlying cryptocurrencies. Many pundits expect the launch of spot bitcoin ETFs to result in a flood of mainstream money into the crypto market — which would fuel buying pressure for BTC.
In Matrixport’s opinion, spot ETF approval would not trigger a “sell-the-news” reaction but instead lead to significant price growth for the world’s largest cryptocurrency. The report stresses that spot market ETFs would fortify bitcoin’s position as a legitimate asset class for institutional investors, possibly serving as collateral for obtaining other assets.
More Reasons 2024 Could Be Very Bullish For BTC
Matrixport also highlighted the drastic shift in sentiment among institutional clients. Unlike last year, the present market dynamics have made institutional customers mindful of missing out on potentially huge gains, and are thus expected to go all-in as soon as the markets open for trading in 2024.
“Institutional investors cannot afford to miss out on any potential rally again and, therefore, have to buy immediately when the markets open for trading in 2024,” the digital asset service platform posited.
Matrixport also drew attention to historical trends, noting that BTC tends to enjoy a parabolic rally during halving cycles coinciding with the U.S. election period. The average return during the 2012, 2016, and 2020 election years was an outstanding +190%, indicating the likelihood of Bitcoin hitting the $125,000 target for 2024 set by Matrixport in a Nov. 30 note.
Bitcoin is expected to undergo halving — when mining rewards are slashed by 50% — in mid-April 2024. That said, the probability of history repeating itself is high. Crypto traders will be closely watching developments this week as bitcoin bulls look to break above the $50,000 zone.