When Bitcoin, with a market value of US$1 trillion, can rise by 50% within a month, Markus Thielen's market analysis report is widely spread in the community. Of course, everyone is more familiar with his title-analyst of Matrixport. At the same time, he is also a researcher at 1 0X Research. Markus's Bitcoin report has been quite accurate in predicting the price of Bitcoin in recent months. It seems that both the rise and fall are within his calculations. Not long ago, Markus even analyzed that Bitcoin was at risk of falling, and the market fell in response, which made Markus famous. Big noise.

Markus Thielen

When Bitcoin has reached $60,000, less than 10% away from the previous high of $69,000, BlockBeats chatted with Markus. The most important information for everyone is that this unusually accurate analyst believes that Bitcoin can reach $125,000 this year. Of course, beyond prices, Markus also talked about the impact of ETFs and his views on the market.

BlockBeats: Okay, first of all, can you briefly share your experience, how you joined Matrixport as a Bitcoin analyst?

Markus: I was head of quantitative and derivatives strategy at Morgan Stanley a few years ago and basically became a portfolio manager, working for big banks and big hedge funds, and also setting up my own hedge fund in Hong Kong, Also served as chief investment officer of a crypto asset management company. The experience of these jobs brought me to Matrixport.

BlockBeats: So you started trading Bitcoin many years ago?

Markus: Yeah, I first started looking at Bitcoin in 2013 and we tried setting up some trading platform arbitrage as a side hustle in 2015, but full-time trading was a few years ago. When market capitalization becomes quite high, Bitcoin really becomes a macro asset, which is why we can make predictions correctly. Quantitative analysis, macro analysis, and liquidity analysis, these sectors form the basis of the market. Basics of forecasting.

BlockBeats: Got it, let’s talk about Bitcoin directly. You said last November that Bitcoin could rise to $57,000. Is this going beyond your expectations?

Markus: First, in October 2022, we said that Bitcoin could reach $63,000 in March of this year, entering the halving period. Our views and analysis are actually supported by data. We do not put forward price targets casually. There is always a quantitative approach behind it. When we said last November that Bitcoin could hit $57,000, we frankly have exceeded expectations now.

In October '22, about 15 months ago, we were already looking at the $60,000 level. But the reality is, when you look at the symmetry of previous cycles, the bull market is actually only halfway through. When you understand how previous bull markets have evolved, you won’t be surprised to see Bitcoin gain 10% overnight. For example, according to some analysis we did this morning (February 29), it is difficult for us to be bearish here because it will continue to rise.

BlockBeats: Do you think this bull market is only halfway through?

Markus: Based on the data we're running, it looks like we're only halfway through this bull market. That doesn't mean we're still going up 150% or 160%. But when you look at the previous cycles, I can show you a chart (see below) that if you bought 500 days before the halving, that was actually the bottom. And then the next 500 days, which is 18 months, is the second phase of the rebound.

When we did our analysis in October 2022, this chart suggested we were at the bottom. Now a lot of Bitcoin holders are saying you should buy Bitcoin after the halving because it tends to go up after the halving, but our view has always been that you should buy Bitcoin 14 to 15 months before the halving because It will most likely be at a low point at that time. So yes, we are still halfway into a bull market.

BlockBeats: I can’t imagine how high Bitcoin can go.

Markus: There are two data. We don’t just say some numbers casually. I don’t rely on feeling trading. But over the past three presidential elections, which of course coincided with the halving cycle, so the U.S. elections in 2012, 2016, and 2020, Bitcoin’s average return in those years was 192%, and Bitcoin’s return in each of those years All increased by more than 100%. So based on 192%, we start the year at $40,000 and by the end of the year Bitcoin can reach $125,000. One indicator we saw last July was that when Bitcoin hit a new one-year high for the first time in a year, there was a 300% rally, so that number could also push $125,000. We were very accurate last year, and we may be more conservative this year. Bitcoin may reach $125,000 by the end of this year or next year.

BlockBeats: $125,000, that’s crazy, so what’s the biggest reason why Bitcoin is able to reach this level, is it an ETF? I feel like each of us is underestimating the impact of ETFs.

Markus: What Asia may not understand or really not realize is that a lot of asset managers in the U.S. are using ETFs to make their asset allocation decisions. In Asia, people like to buy specific stocks, such as individual stocks like Bank of China, compared to the U.S., if investors like banks, they will buy the entire basket, which is what ETFs are really about.

These asset management companies manage a large amount of money, not just one thousand dollars, but tens of billions. They won't say they invested one million dollars in JPMorgan Chase. They will only say that it is a bank index worth one billion dollars. These people have access to ETFs that are truly astronomical. We've been trying to show since July last year that if these ETFs were approved, these magnitudes of dollars coming in, the impact would be huge.

The market has been comparing Tether’s market cap changes to Bitcoin’s price. For example, the minting of 10 billion USDT should theoretically mean that 10 billion U.S. dollars of fiat currency enter cryptocurrency. But now instead of going through USDT, that money can flow into these Bitcoin ETFs, so now we're seeing a surge.

BlockBeats: So ETFs are the biggest reason for the surge right now?

Markus: It’s an ETF, but ETF represents the institutionalization of Bitcoin. I have traded gold, interest rates, and foreign exchange. When some uncertainty occurs, you buy gold because it is a safe haven. But Bitcoin is a better hedge. First, it reacts much more strongly to changes in U.S. interest rates. It reacts much more strongly to war, with Bitcoin rising stronger than gold during the Russia-Ukraine conflict. You know, when there's a banking crisis in the United States, like we saw last March, Bitcoin went from 20,000 to 28,000 in two weeks. Bitcoin is becoming a better macro asset than gold.

There are now two largest gold ETFs with $80 billion in AUM, including a $55 billion gold ETF that had $2.7 billion in outflows. I suspect these outflows were moved to Bitcoin, which I believe was an allocation shift from gold to Bitcoin. So we may not see registered investment advisers or institutions buying Bitcoin in person now, we may only see people who own gold moving their allocations to digital gold.

BlockBeats: Do you think there will be another black swan event?

Markus: Basically not. We are in a bull market. It seems unlikely from regulation and the Bitcoin network itself. The only possible black swan event is that someone can access Satoshi Nakamoto’s wallet.

BlockBeats: Many people are curious about how you analyze the market. Do you use any tools or models?

Markus: Yes, we have a lot of tools that we run every day. Every day for the past few years, whether it's weekends or holidays, I've been saving data as soon as I wake up, just so we can understand what's going on and see if there's any change in supply and demand. At the same time, we ran a lot of quantitative models. For example, Bitcoin was overbought at $48,000 two weeks ago, and the market concluded that it was about to take profits. But in fact, our backtest gave exactly the opposite conclusion. In October 2022, everyone was talking about regulation, bear market, bankruptcies in the United States, Bitcoin was at $20,000, but we raised $63,000. It seemed a bit strange at the time, but the data tells us.

BlockBeats: Have you ever had a time when the data told you it was going up but you thought it was going down?

Markus: In my experience, the data is often correct. And the most painful moment is really when you see that your model was correct and you didn't engage as the model said it would.

Like last night I thought I should settle some profits, but suddenly I saw a lot more trading activity in South Korea in the last 24 hours, and a few months ago on Upbit, the trading volume was less than $1 billion. But in the past 24 hours, trading volume exceeded $7 billion. So Asian trading hours are no longer sideways.

BlockBeats: More and more people are reading your reports, and it seems that your reports are increasingly affecting the market. Do you feel more pressure?

Markus: Yes. To provide our readers and subscribers with good analysis and high-quality reporting. The more attention you get and the more people follow you, the greater the pressure. Especially when we’ve been accurate so many times, of course we’re afraid of the times we’re not accurate. But I still trust my data model.

BlockBeats: Besides ETFs and inflows into gold, are there other reasons that could push Bitcoin prices higher?

Markus: Honestly, I see no other reason right now. This bull market is very different. The last bull market was DeFi summer, where altcoins were the protagonists, but this time it was more or less focused on Bitcoin.

BlockBeats: So it might just be a Bitcoin bull market, not an altcoin bull market.

Markus: Yes.

BlockBeats: But a lot of people would think that money gained from Bitcoin can flow to other altcoins.

Markus: Those who buy ETFs don’t see it this way. Bitcoin’s dominance is about 52%. If altcoins really rebound, Bitcoin’s dominance will drop below 50%, and I don’t see the altcoin narrative. , there is still narrative in DeFi summer. But now I don't see it.

BlockBeats: How long do you think this bull market will last?

Markus: I think it lasts until February or September next year.