With Bitcoin ETFs Behind It, BTC Will Rise to $80,000 – Analyst Says

In the USA, Bitcoin ETFs are entering their sixth full week of trading this Monday; their approval on January 10th came after years of back and forth. The price curve of Bitcoin (BTC) is now developing positively: on January 10th, the crypto reserve currency was still trading at around $46,000; Bitcoin is currently around $52,000.

The forecasts seem to be slowly coming true, which assume that new investors will use the financial instrument Bitcoin ETFs to get into BTC in a regulated environment and thus ensure an inflow of capital. 10 Bitcoin ETFS are currently competing in the USA. Bitwise was able to report over the weekend that it had broken the $1 billion mark in investor funds.

At the same time, the head of the investment department at Bitwise, Matt Hougan, gave a look behind the scenes in an interview and explained why, in his opinion, Bitcoin ETFs are on the way to a sustainable success story. Hougan says demand for the Bitwise Bitcoin ETF and its competitors has even exceeded internal forecasts. The data for the first day of trading and for January actually show that Bitcoin ETFs are on record when compared to other ETF debuts.

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Hougan compares the market entry of Bitcoin ETFs to an initial public offering (IPO)

Banks, financial service providers and institutional investors, for example, would now have access to the Bitcoin asset class for the first time because ETFs go through a strict testing process before they are approved. Hougan expects Bitcoin ETFs to continue to raise significant capital from first-time investors.

When asked about the price forecast for Bitcoin in 2024, Hougan refers to Bitwise’s annual forecast from December 2023. There, the price target of $80,000 is announced for BTC this year and, in addition to the approval of Bitcoin ETFs, a second foreseeable event is cited as the main argument.

Bitcoin Halving in April affects the balance of demand and supply

Because in the second half of April there will be a Bitcoin Halving , the fourth in the history of BTC. With Bitcoin Halving every four years, inventor Satoshi Nakamoto wanted to ensure that BTC contained an inflation brake. To do this, the bonuses that Bitcoin miners receive for updating the BTC blockchain through their work are halved. In concrete terms, this will mean in the future that instead of the current around 900 Bitcoin per day, only around 450 BTC will be mined by miners per day and will be able to come onto the market.

Bitwise writes laconically “More demand? Less offer? You do the math.” We’re happy to help: On many of the previous trading days for Bitcoin ETFs, there were so many investments that the providers had to buy a total of 10,000 BTC a day in order to physically secure their ETFs with Bitcoin as required.

If the trend continues, Hougan said, this is precisely the “sustainable demand” that will continue to drive the Bitcoin price curve. Institutional investors usually pursue medium and long-term strategies and, according to Hougan, will not exit just yet.

Conclusion: Will Bitcoin ETFs and Halving pave the way to a new all-time high?

Bitcoin’s previous all-time high was from November 2021 and was just under $69,000. In the crypto scene, this mark is often mentioned as the next price target that must be reached before Bitcoin can move towards $100,000. Things are similar at Bitwise. But we also don’t want to forget risks, which lie, for example, in the presidential election in the USA late in 2024 and could mean a change in the direction of crypto policy.

Or the problem with larger BTC holdings, which initially caused capital outflows in the case of the Grayscale Bitcion ETF , for example . Many countries around the world have confiscated Bitcoin under their control and could turn it into money.

Compensations for the huge Bitcoin hack Mt. Gox are also set to begin soon and could bring more than 1,000,000 BTC onto the market this year. What remains clear is that the majority of market participants are currently extremely positive about the prospects for the price of Bitcoin, citing the first ETF experiences as well as the upcoming Bitcoin halving.

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(Featured image by Erling Løken Andersen via Unsplash)

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