Matrixport Sees Bitcoin's Santa Rally Surging to $56K

Markus Thielen, the head of research and strategy at crypto financial services firm Matrixport, reportedly conveyed to clients recently that Bitcoin’s performance this year could be a reliable indicator of its year-end position.

According to a report by Omkar Godbole for CoinDesk, citing historical data, Thielen highlighted that when Bitcoin records a surge of at least 100% within a year, it usually has a 71% probability—or a chance of five out of seven—to climb higher by the year’s end, typically seeing an additional average increase of 65%.

The report noted that as it stands, Bitcoin has been trading north of the $35,000 mark, which represents a substantial 114% increase on a year-to-date basis. Analysts have linked this remarkable performance to a combination of factors, including the market’s anticipation of imminent approval spot Bitcoin ETFs, speculation that the Federal Reserve may have reached the zenith of its liquidity tightening measures, and the cryptocurrency’s role as a safe haven asset.

According to CoinDesk, on November 2, Thielen had this to say in a note he sent to his firm’s clients:

If bitcoin is up at least +100% by this time of the year, then there is a +71% chance or five in seven that bitcoin would finish the year higher with average year-end rallies of +65% … As bitcoin tends to reach its peak by December 18th, we could call the six to seven weeks from early November to mid-December Bitcoin’s Santa Claus Rally.

AllianceBernstein Holding L.P., widely recognized as Bernstein, is an investment management firm with a worldwide footprint, catering to a broad client base that includes institutional entities, affluent individuals, and retail investors. The firm, headquartered in Nashville, Tennessee, extends its reach with offices spanning across the globe.

On October 31, CNBC reported Bernstein’s projection that Bitcoin could see a substantial rise in value to $150,000 by 2025. This projection is contingent on the U.S. Securities and Exchange Commission (SEC) sanctioning a spot Bitcoin exchange-traded fund (ETF) by the first quarter of 2024, a move Bernstein views as increasingly likely.

Bernstein’s bullish stance indicates a potential fivefold appreciation from Bitcoin’s present valuation near $34,000 and more than a 100% increase from its record high of over $67,000 in November 2021. The firm’s analysis suggests that SEC approval of a Bitcoin ETF could lead to as much as 10% of Bitcoin’s circulating supply being absorbed by ETFs, thereby providing a straightforward avenue for conventional investors to engage with Bitcoin, a marked enhancement over Grayscale’s Bitcoin Trust, which currently encompasses about 3% of Bitcoin in circulation.

Gautam Chhugani of Bernstein highlighted the critical nature of the timing for the approval of a Bitcoin ETF. Despite one’s personal stance on Bitcoin, he advises a neutral viewpoint, treating it as a commodity ripe for ETF integration. His remarks were part of an extensive assessment that also included initiating evaluations of several Bitcoin mining operations.

Furthermore, the analysis anticipates the Bitcoin halving event slated for April 2024, which will slash mining rewards by half, as dictated by Bitcoin’s code. Chhugani anticipates that this will naturally cull less effective mining operations, thereby benefiting the more robust competitors remaining in the market.

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