Matrixport, a cryptocurrency financial services firm, has reiterated its earlier forecast that Bitcoin’s price could hit $45,000 by the year’s end, fueled by a surge of FOMO (fear of missing out) sentiment in the Bitcoin market. This prediction coincides with a rise in Bitcoin’s market dominance to 52.1% and a substantial increase in its trading volume, reaching $29 billion in the last 24 hours.
“Abnormally High Bitcoin Futures Funding Rates”
Matrixport links the resurgence of FOMO sentiment to the unusually high Bitcoin futures funding rates, indicating that many traders are engaging in impulsive buying. Earlier in the year, Matrixport had set a year-end price target of $45,000 for Bitcoin. With Bitcoin’s price rebounding amidst growing anticipation of spot Bitcoin ETF approval, the analyst firm has reaffirmed its earlier forecast. The company believes that Bitcoin’s price could receive an additional lift if the U.S. Securities and Exchange Commission (SEC) approves a BlackRock spot Bitcoin exchange-traded fund (ETF). Matrixport’s report suggests that if 10%-20% of gold ETF investors opt to diversify their holdings into Bitcoin, it could lead to potential inflows of $12-24 billion into the Bitcoin ETF. This estimate is considered relatively conservative, considering that the market cap of the Grayscale Bitcoin Trust (GBTC) has previously peaked at $44 billion.
Spot Bitcoin ETF Approval Could Send BTC Price to $56,000
Following BlackRock’s application for a spot Bitcoin ETF, Bitcoin’s price witnessed a substantial surge. Matrixport estimates that if the ETF gets approved, Bitcoin’s price could potentially climb to $56,000. Despite the SEC’s recent postponement in reviewing ETF applications, a growing sentiment suggests that the cryptocurrency market could witness a substantial inflow of institutional capital. Matrixport highlights the potential influence of the 15,000-strong U.S. registered investment advisor (RIA) community, which oversees around $5 trillion in assets. Even a conservative 1% allocation recommendation for Bitcoin from this group could result in inflows of approximately $50 billion.