FOMO Grabs Hold of the Crypto Market
The cryptocurrency landscape is currently under the spell of FOMO (Fear Of Missing Out), and Matrixport, a prominent crypto financial services provider, has reasserted its earlier projection that Bitcoin’s price could soar to $45,000 by year-end. This comes at a time when Bitcoin’s market dominance has surged to 52.1%, accompanied by a notable uptick in trading volume, which recently reached an impressive $29 billion within a 24-hour window.
Section 1: “Abnormally High Bitcoin Futures Funding Rates” Fuel FOMO
One key driver behind this resurgence of FOMO sentiment is the observation of “abnormally high Bitcoin futures funding rates.” These elevated rates imply that a substantial number of traders are currently engaging in panic buying, driven by the fear of missing out on potential gains. Matrixport identifies this as a significant catalyst for the prevailing fervor in the Bitcoin market.
Section 2: Doubling Down on the $45,000 Bitcoin Prediction
Earlier in the year, Matrixport had set a year-end target of $45,000 for Bitcoin. Now, with Bitcoin’s price making a strong comeback, largely fueled by the mounting anticipation of the approval of a spot Bitcoin Exchange-Traded Fund (ETF), the analytical firm is reaffirming its earlier prediction. Matrixport is banking on the prospect of the U.S. Securities and Exchange Commission (SEC) granting approval for a spot Bitcoin ETF, particularly one filed by BlackRock.
Section 3: Potential for Significant Bitcoin Inflows
Matrixport’s report underscores the potential for substantial inflows into Bitcoin, should 10% to 20% of gold ETF investors decide to diversify their portfolios into Bitcoin. This diversification could amount to an impressive $12-24 billion influx into Bitcoin ETFs. It’s worth noting that this estimate is considered relatively conservative, given the historical performance of the Grayscale Bitcoin Trust (GBTC), which achieved a peak market cap of $44 billion.
Section 4: Spot Bitcoin ETF Approval and the $56,000 Scenario
The anticipation of a spot Bitcoin ETF approval has already sent ripples through the market, particularly following BlackRock’s application for such an ETF. If this approval materializes, Matrixport envisions a potential Bitcoin price surge to $56,000. Despite the recent SEC delay in reviewing ETF applications, there’s a growing belief that the cryptocurrency market could witness a substantial inflow of institutional funds.
Section 5: The Influence of the U.S. Registered Investor Advisor (RIA) Community
Matrixport directs attention to the influential U.S. Registered Investor Advisor (RIA) community, consisting of approximately 15,000 advisors managing around $5 trillion. Even a conservative 1% allocation recommendation for Bitcoin from this group could usher in an influx of approximately $50 billion into the cryptocurrency market. This signifies the growing institutional interest that is poised to further shape the crypto landscape.