Key Points
Matrixport, a financial services platform, has projected that the price of Bitcoin will reach $63,000 by the end of March 2024.
This estimation implies a 21% increase in Bitcoin’s price, which has already risen 15.6% since the start of 2024.
Matrixport identifies four primary factors that could drive this price surge.
Factors Influencing Bitcoin’s Price
Since their introduction last month, Bitcoin ETFs have seen significant inflows due to high institutional demand.
Early this week, the daily trading volume for Bitcoin ETFs peaked at nearly $2 billion, the highest since trading started on January 11.
Last week, Bitcoin ETFs saw an influx of about $2.3 billion, almost double the previous week’s inflow of $1.2 billion.
On February 22, Bitcoin spot ETFs experienced net inflows of $251 million.
However, individual ETFs showed variations: Grayscale ETF GBTC recorded a net outflow of $55.67 million, while Fidelity ETF FBTC saw a net inflow of $158 million.
This contributed to a historical net inflow of $4.05 billion.
BlackRock ETF IBIT reported a single-day net inflow of $125 million, bringing its total historical net inflow to $5.74 billion, according to data from SoSoValue.
In addition to Bitcoin ETFs, Bitcoin bulls are focusing on the upcoming halving scheduled for April 2024.
The upcoming Bitcoin halving will reduce the block rewards from 6.5 BTC per block to 3.25 BTC per block.
This will increase the demand/supply ratio and widen the gap, providing a boost to Bitcoin’s price.
According to Willy Woo, the Bitcoin network is currently seeing a daily influx of about $607 million in new investor demand.
This contrasts sharply with the relatively modest $46 million per day in new supply from newly mined coins.
This indicates that Bitcoin’s demand is 13 times greater than its supply, a disparity that will only grow after the halving.
Matrixport’s report also emphasizes the crucial role of the Federal Reserve’s stance on interest rates.
A potential interest rate cut could stimulate demand for higher-risk assets, possibly leading to a rise in cryptocurrency prices.
The global investors’ community is waiting for the Fed’s decision on rate cuts.
However, considering the current inflation situation, rate cuts are unlikely to happen in the first half of the year.
While US indices are performing well on Wall Street, with the S&P 500 reaching record highs, a US recession cannot be entirely ruled out.
The upcoming US Presidential Elections in 2024 and the associated policy uncertainties add complexity to Matrixport’s analysis.
The interaction between political developments and cryptocurrency markets makes it difficult to definitively predict Bitcoin’s trajectory.
According to Matrixport, February has historically been a good month for Bitcoin investments.
Based on ten-year charts, February has seen an average profitability of 8% for Bitcoin in seven out of ten instances.
