Recent data and forecasts suggest that Bitcoinis poised for significant growth, with the Fear Of Missing Out (FOMO) sentiment making a strong comeback among investors.
Matrixport, a renowned crypto financial services company, has reiterated its earlier prediction that Bitcoin’s price could soar to $45,000 by the end of 2023. This renewed forecast comes in the wake of Bitcoin’s market share surging to an impressive 52.1%. Additionally, the trading volume for Bitcoin has witnessed a substantial increase, touching the $29 billion mark in just 24 hours.
One of the primary factors driving this bullish sentiment is the “abnormally high Bitcoin futures funding rates.” Matrixport suggests that these elevated rates indicate a trend of panic buying among traders, further fueling the FOMO sentiment.
Earlier in the year, Matrixport had set a year-end target of $45,000 for Bitcoin. With the recent surge in Bitcoin’s price, primarily driven by the growing anticipation of a spot Bitcoin ETF approval, the firm has doubled down on its initial prediction.
Matrixport’s comprehensive report sheds light on the potential impact of a U.S. Securities and Exchange Commission (SEC) approval for a BlackRock spot Bitcoin exchange-traded fund (ETF).
The firm posits that if 10%-20% of gold ETF investors diversify their portfolios to include Bitcoin, it could lead to an influx of $12-24 billion into the Bitcoin ETF. This projection is deemed conservative, especially when considering that the market cap of the Grayscale Bitcoin Trust (GBTC) once peaked at $44 billion.
The crypto community is abuzz with the anticipation of a spot Bitcoin ETF approval, which has already influenced market dynamics. BlackRock’s application for a spot Bitcoin ETF has been a significant catalyst for Bitcoin’s price surge. If the SEC gives the green light, Matrixport estimates that Bitcoin’s price could rally to an even more optimistic figure of $56,000.
Despite recent delays by the SEC in reviewing ETF applications, there’s a growing consensus that the cryptocurrency market could soon see a massive influx of institutional funds. Matrixport highlights the potential influence of the 15,000-strong U.S. registered investor advisor (RIA) community, which manages assets worth approximately $5 trillion.
A modest 1% allocation recommendation for Bitcoin from this influential group could result in an injection of around $50 billion into the market.