As the final months of the year approach, the anticipation surrounding the approval of spot Bitcoin exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC) has generated considerable excitement among analysts and traders. While many stake their hopes on these index funds to fuel a significant price surge for Bitcoin and the broader crypto market, Matrixport, a digital assets financial services platform, offers a distinct perspective.
According to their latest report, Matrixport firmly believes that Bitcoin and crypto prices are destined to soar in 2024, irrespective of the SEC’s decision on ETF approval. One influential factor identified by Matrixport is the recent declaration of victory by Jerome Powell, the Chairman of the US Federal Reserve (Fed), in the institution’s fight against inflation.
Powell’s mention of possible rate cuts caught the attention of the digital asset platform, which noted in its report that Bitcoin prices jumped nearly 300% in 2019 when the Fed ended its hiking cycle and kept rates on hold for an extended period. This historical correlation between rate cuts and Bitcoin price surges creates a hopeful outlook for the future.
Moreover, Matrixport’s analysis incorporates a proprietary inflation model presented a year ago, which projected a sharp decline in inflation from 8% to 3-4% by the end of 2023. This model instilled great confidence in the platform, suggesting that risk assets, including stocks and cryptocurrencies, would witness a substantial rally in 2023.
Matrixport’s proprietary inflation model also indicates the possibility of the US Consumer Price Index (CPI) dipping below 2% by the end of 2024. This prediction holds significant implications for Bitcoin’s price and its role as a potential hedge against inflation. In a more subdued inflationary environment, investors might seek alternative assets such as BTC that can preserve their purchasing power and shield them from the erosion of value caused by inflation.
Importantly, Matrixport emphasizes that even if the SEC maintains its disapproval of Bitcoin Spot ETFs in January 2024, higher crypto prices are still expected throughout the year. This assertion challenges the prevalent belief that ETF approval is the key driver for Bitcoin price surges in the market.
Furthermore, the report highlights the substantial growth of assets in US money market funds, which have doubled since the onset of the COVID-19 pandemic, reaching a staggering $6.1 trillion. This growth implies an additional $320 billion in interest rate payments per year, creating a potential influx of $370 billion annually or roughly $1 billion daily into risk assets such as stocks and cryptocurrencies. This injection of liquidity into the market could contribute to the upward trajectory of Bitcoin and crypto prices in 2024.
Matrixport’s bullish outlook for 2024 also takes into account significant events on the horizon. The year marks a Bitcoin halving cycle, historically associated with substantial price increases averaging 192%. This cyclical phenomenon, coupled with the growing adoption and mainstream recognition of cryptocurrencies, provides a compelling argument for an upward price trend in 2024.
Additionally, 2024 is an election year, and the possibility of former President Donald Trump being reelected is considered high. Matrixport suggests that his policies could potentially bolster the US economy, thereby driving up stock prices and cryptocurrencies. The political uncertainty surrounding the election outcome adds an element of speculation to the price projections for Bitcoin and other digital assets.
Matrixport’s contrarian perspective on the future of Bitcoin and crypto prices in 2024 challenges the prevailing narrative driven by the anticipation of SEC-approved Bitcoin Spot ETFs. Their analysis, incorporating factors such as rate cuts, inflation models, money market funds, halving cycles, and political events, presents a compelling case for potential price surges in the coming years. While the crypto market remains unpredictable, Matrixport’s research offers a fresh and alternative viewpoint for investors and traders alike to consider. As always, it is important to conduct thorough research and exercise caution when making investment decisions in the volatile world of cryptocurrencies.