Bitcoin to Hit $160K in 2024 after Halving, Spot ETF Approval, Fed Interest Rate Cuts: CryptoQuant
CryptoQuant says factors like the halving, ETF, approval, and rate cuts, could push Bitcoin to $160K next year.
Analysts are bullish on the potential of Bitcoin (BTC) for next year, indicating several factors that could pump the price to $160,000. According to a blockchain analytics firm CryptoQuant report, Bitcoin may already be on its way to more than double its current all-time high (ATH).
Multi-Factorial Push for Bitcoin, According to CryptoQuant
CryptoQuant highlighted several indicators, including the upcoming Bitcoin halving in April, increased network activity as demand rises, and recorded growth in stablecoin liquidity. In addition, macroeconomic factors, such as interest rate cuts expected next year, could push Bitcoin into much more bullish territory. The analysts wrote:
“On-chain valuation and network metrics signal Bitcoin remains well inside a bull market and may be targeting $54,000 in the medium term and $160,000 as this cycle price top.”
One major factor in Bitcoin’s favor is the spot Bitcoin exchange-traded fund (ETF) approval expected early next year. Currently, the United States Securities and Exchange Commission (SEC) is reviewing 13 applications and must decide by January. For the ARK 21Shares ETF from ARK Invest and 21Shares, the SEC has until January 10 to approve or dismiss. Also, the Commission must decide on the application from giant asset manager BlackRock Inc (NYSE: BLK) by January 15. According to MicroStrategy co-founder and Executive Chairman, “this might be the biggest development on Wall Street in 30 years.”
In October, CryptoQuant forecasted a possible $155 billion entering the Bitcoin market via spot Bitcoin ETFs. According to the firm, all this would take is each applicant committing 1% of its Assets Under Management (AUM). This prediction also puts Bitcoin’s price between $50,000 and $73,000.
In addition to spot Bitcoin ETFs, there is the halving event expected next April. The upcoming event will cut miner block rewards from 6.5 BTC to 3.25 BTC. Historically, Bitcoin begins to rally after the event, although not necessarily immediately after. Since the halving reduces the number of Bitcoins entering circulation, the event is positive for Bitcoin’s prices.
Market Should Expect Price Correction
Rate cuts are also expected to be positive for Bitcoin. Observers predict that the US Federal Reserve will cut interest rates as inflation improves. Interestingly, Goldman Sachs has forecasted three rate cuts for next year, in March, May, and June. In addition, the Fed hinted at 75 basis points in rate cuts next year based on its projections. The apex bank forecasts that 2024 will end with inflation at 2.4%, down from the earlier 2.6%.
Despite the bullishness, CryptoQuant warned that investors should expect Bitcoin’s price to pull back a little. The report says:
“In the short-term, there are some risks of a price correction given that short term Bitcoin holders are experiencing high unrealized profit margins, which historically has preceded price corrections.”
CryptoQuant has also noted an increase in miner fees. According to the firm, mining revenue and fees for December 16 crossed $23.7 million, an all-time record. This record is mainly due to trading Ordinals volumes, which has soared recently. In the 24 hours between December 17 and 18, Ordinals sales volume nearly hit $40 million, surpassing the volumes of NFTs on Solana (SOL) and Ethereum (ETH).
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