As we approach the final month of the year, anticipation is growing surrounding the acceptance of spot Bitcoin. exchange traded fund ETFs announced by the U.S. Securities and Exchange Commission (SEC) have generated considerable interest among analysts and traders.
Although many people are pinning their hopes on these index funds, price surge Matrixport, a digital asset financial services platform, offers a unique perspective on Bitcoin and the broader cryptocurrency market. According to their latest reportMatrixport strongly believes that Bitcoin and cryptocurrency prices are destined to skyrocket in 2024, regardless of the SEC’s decision to approve ETFs.
Is the Fed’s interest rate cut a catalyst?
One of the influential factors identified by Matrixport is the recent declaration of victory by US Chairman Jerome Powell. federal reserve bank (Fed), in the fight against inflation.
Powell mentions possibility interest rate reduction In 2019, the price of Bitcoin surged nearly 300% as the Federal Reserve ended its rate hike cycle and kept interest rates on hold for an extended period of time, drawing the attention of digital asset platforms, which noted in the report.
Matrixport’s current scenario is similar, with the Fed projecting three cuts equivalent to 75 basis points in 2024.
Moreover, Matrixport’s analytics include proprietary inflation model A report released a year ago projected inflation to fall sharply from 8% to 3-4% by the end of 2023. The model instilled great confidence in the platform, suggesting that risk assets, including stocks and cryptocurrencies, will witness a significant rebound in 2023.
A potential decline in CPI strengthens BTC’s role as an inflation hedge.
Matrixport’s proprietary inflation model also represents possibilities for the United States. consumer price index (CPI) will fall below 2% by the end of 2024. This prediction has important implications for the price of Bitcoin and its role as a potential hedge against inflation.
CPI serves as a key measure of inflation, reflecting the change in average prices of a basket of goods and services over time. A drop below 2% signals a slowdown in price growth and a potentially easing inflationary environment.
In such a scenario, investors may pursue: alternative assets Something like BTC that can preserve purchasing power and protect against decline in value due to inflation.
Is the SEC’s Bitcoin ETF decision irrelevant?
Importantly, Matrixport highlights that even if the SEC maintains its disapproval of a Bitcoin spot ETF in January 2024, cryptocurrency prices are still expected to rise throughout the year.
The report also highlights that assets in U.S. money market funds have doubled since the start of the COVID-19 pandemic, reaching $6.1 trillion. This growth would mean $320 billion in additional interest payments per year, generating potential inflows of $370 billion per year, or about $1 billion per day, into risky assets such as stocks and cryptocurrencies.
Matrixport’s optimistic outlook for 2024 also takes into account significant upcoming events. This year it means Bitcoin half life cycleHistorically, this has been associated with significant price increases of 192% on average.
Moreover, 2024 is an election year, and former President Donald Trump’s chances of being re-elected are assessed to be high. Matrixport suggests his policies could potentially strengthen the U.S. economy, boosting stock prices and cryptocurrencies.
As of this writing, the largest cryptocurrency on the market is currently trading at $42,600, up 1.8% in the last 24 hours.
Featured image from Shutterstock, chart from TradingView.com
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