In a recently released report, investment research firm Fundstrat recently made a staggering Bitcoin ($BTC) price prediction, suggesting that the cryptocurrency could jump more than 500% from its current value to hit the $180,000 mark before its upcoming halving in April 2024.
According to Markets Insider, Fundstrat said that while the current daily demand for the flagship cryptocurrency is about $25 million, equivalent to the current daily reward for mining, this equation may undergo a major adjustment with the potential launch of a spot Bitcoin exchange-traded fund (ETF).
The report states that a spot Bitcoin ETF could bring $100 million in incremental daily demand for the cryptocurrency, and coupled with the halving event in April 2024, when mining rewards will be cut in half to $12 million per day, the demand for Bitcoin ETFs will increase significantly. The price of Bitcoin will balance the market equilibrium between buyers and sellers.
The note adds:
[A Bitcoin ETF] would bring daily demand to $125 million with a daily supply of only $25 million. The implied equilibrium price would need to rise so that daily supply matches daily demand. Equilibrium analysis suggests a liquidation price of $140,000 to $180,000 before the April 2024 halving.
Historically, the Bitcoin halving has been a bullish event for the cryptocurrency, with its price surging in the months following each halving. Earlier this month, Sean Farrell, head of digital asset strategy at Fundstrat, noted to clients that a 4.0x to 5.0x multiplier effect is a reasonable prediction for the Bitcoin network.
According to him, this means that “$1 of demand could result in an increase of $4 to $5 in market capitalization.” In the same report, Farrell gave a 75% chance of a spot Bitcoin ETF being approved in the near future, as a number of companies, including BlackRock and Fidelity, have applied to list such products.
If approved, a spot bitcoin ETF from BlackRock, the world’s largest asset manager, could become one of the largest ETFs ever, Fundstrat said, potentially surpassing the current record holder, Invesco’s QQQ ETF, which attracted $36 billion in inflows in its first year after launching in March 1999 and tracks the Nasdaq 100 Index.
Fundstrat went on to say that Bitcoin ETFs could eventually dwarf the precious metals ETF market, which currently holds around $230 billion in assets, and predicted that Bitcoin ETFs could become a category worth more than $300 billion.
Earlier, Standard Chartered, a London-based multinational bank and financial services company, said that the price of the flagship cryptocurrency could soar to $50,000 this year and could break through $120,000 by the close of 2024, another major bullish price prediction for BTC, CryptoGlobe reported.
