Crypto Financial Services Platform Matrixport Predicts Major Bitcoin Rally
Matrixport, a crypto financial services platform, has predicted a significant rally in Bitcoin’s price. The company believes that favorable macroeconomic conditions and lower US inflation will drive this rally. One notable development supporting this prediction is the impressive performance of Grayscale Investments’ Bitcoin Trust (GBTC) shares, which have grown by 167% year-to-date, outperforming Bitcoin itself.
Earlier this year, GBTC’s net-asset-value (NAV) discount stood at -45% and has since slightly narrowed to -43%. However, the real game-changer came with BlackRock’s announcement of its Bitcoin ETF application on June 15, 2023.
Matrixport also highlighted the potential impact of the US registered investor advisor (RIA) community. With approximately 15,000 advisors overseeing around $5 trillion, even a modest 1% allocation recommendation for Bitcoin could bring in around $50 billion in inflows.
The company compared this potential inflow to precious metals ETFs, which have a market cap of around $120 billion. Assuming that 10-20% of precious metal ETF investors consider diversifying into a Bitcoin ETF as a hedge against monetary debasement and inflation, Matrixport estimates an inflow of $12 to $24 billion into the Bitcoin ETF.
“If Tether’s market cap increases by $24 billion, acting as a proxy for potential ETF inflows, Bitcoin’s price would rise to $42,000, representing a conservative estimate.”
In addition to this, if there is a larger influx of $50 billion resulting from a 1% allocation recommendation by RIAs, Bitcoin has the potential to rally up to $56,000.
Experts Anticipate Launch of Spot Bitcoin ETF
Matrixport’s projections align with the growing optimism surrounding the launch of a spot Bitcoin ETF. In May, a US court ruled in favor of Ripple in an ongoing lawsuit brought by the SEC, stating that selling XRP on exchanges does not constitute an investment contract.
This ruling has led JPMorgan analysts to believe that the SEC will likely be forced to approve multiple spot Bitcoin ETF applications. They argue that if the SEC were to retroactively withdraw its previous approval of futures-based Bitcoin ETFs, it would be disruptive and embarrassing for the agency.
“It looks more likely that the SEC would be forced to approve the spot bitcoin ETF applications that are still pending from several asset managers, including that from Grayscale.”
Hot Take: Bitcoin’s Rally Potential Boosted by Favorable Conditions and Pending ETF Approvals
Matrixport predicts a major rally in Bitcoin’s price driven by favorable macroeconomic conditions and lower US inflation. The company points to the impressive performance of Grayscale Investments’ Bitcoin Trust shares as evidence. With potential inflows from the US RIA community and the anticipation of a spot Bitcoin ETF launch, Bitcoin could experience significant growth. If Tether’s market cap increases by $24 billion, acting as a proxy for potential ETF inflows, Bitcoin’s price could rise to $42,000. Additionally, with a larger influx of $50 billion resulting from a 1% allocation recommendation by RIAs, Bitcoin has the potential to rally up to $56,000. The pending approval of spot Bitcoin ETF applications adds further optimism to these projections.
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