As the year comes to a close, market analysts and traders eagerly await the approval of spot Bitcoin exchange-traded funds (ETFs) by the US Securities and Exchange Commission (SEC). This development has generated significant excitement and hope for a price surge in Bitcoin and the broader crypto market. However, Matrixport, a digital assets financial services platform, presents a different perspective. In their latest report, Matrixport asserts that Bitcoin and crypto prices are bound to soar in 2024, regardless of the SEC’s decision on ETF approval.
Matrixport draws attention to the recent declaration of victory by Jerome Powell, the Chairman of the US Federal Reserve (Fed), in their fight against inflation. Powell’s mention of possible rate cuts piqued the interest of Matrixport, which observed that Bitcoin prices experienced a nearly 300% jump in 2019 when the Fed ended its hiking cycle and kept rates unchanged for an extended period.
Matrixport’s analysis incorporates their proprietary inflation model, which was presented a year ago and projected a significant decline in inflation from 8% to 3-4% by the end of 2023. This inflation model instilled great confidence in the platform, indicating that risk assets like stocks and cryptocurrencies would undergo a substantial rally in 2023. Additionally, the model suggests the possibility of the US Consumer Price Index (CPI) falling below 2% by the end of 2024.
A CPI below 2% signifies a deceleration in the rate of price increases, potentially indicating a more subdued inflationary environment. In such a scenario, investors may seek alternative assets like Bitcoin (BTC) to preserve their purchasing power and protect against the erosion of value caused by inflation. Matrixport emphasizes that even if the SEC maintains its disapproval of Bitcoin Spot ETFs in January 2024, higher crypto prices can still be expected throughout the year.
Matrixport’s 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, potentially leading to an influx of roughly $1 billion daily into risk assets like stocks and cryptocurrencies.
Upcoming Events and Bullish Outlook
Matrixport’s bullish outlook for 2024 takes into account significant events on the horizon. The year marks a Bitcoin halving cycle, historically associated with substantial price increases averaging 192%. Additionally, 2024 is an election year, increasing the possibility of former President Donald Trump’s re-election. Matrixport suggests that his policies could potentially bolster the US economy, driving up stock prices and cryptocurrencies.
As of now, the largest cryptocurrency, Bitcoin, is trading at $42,600, reflecting a 1.8% increase in the past 24 hours. However, it is important to note that this article is provided for educational purposes only and does not represent the opinions of NewsBTC on investment decisions. It is advised to conduct thorough research before making any investment decisions, as investing always carries risks.
