Based on current metrics, the Bitcoin blockchain is set to undergo another difficulty adjustment before the halving, with an anticipated increase of 1.2% to 2.16% around April 11, 2024. Following this adjustment, there will be 1,344 blocks remaining until the reward is halved. Estimated Increase in Difficulty Precedes Halving In April, bitcoin (BTC) miners face […]
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In a recent report released by Matrixport, a digital assets financial services platform, the spotlight shifts beyond Bitcoin (BTC) as the eagerly anticipated approval of a Bitcoin spot Exchange-Traded Fund (ETF) by the US Securities and Exchange Commission (SEC) could have far-reaching effects.
According to the analysis, not only could the Bitcoin market experience a significant boost, but Tether (USDT) and the broader crypto market could also see positive outcomes.
Matrixport’s foresight, outlined in their 2023 outlook report published on December 9, 2022, projected a substantial crypto rally driven by factors such as lower US inflation and favorable macroeconomic conditions.
This projection anticipated strong rebounds for Bitcoin and Ethereum (ETH), along with a notable decrease in volatility.
Surrounding the approval of these pending applications, a standout performer in the market has been Grayscale Investments’ Bitcoin Trust (GBTC), with its share prices surging by an impressive 167% year-to-date, outpacing Bitcoin’s 71% growth.
While GBTC’s net-asset-value (NAV) discount marginally narrowed from -45% to -43% at the beginning of the year, the game-changing moment arrived when BlackRock announced its ETF application on June 15, 2023.
Matrixport’s earlier reports analyzed the US registered investor advisor (RIA) community, comprising approximately 15,000 advisors overseeing around $5 trillion.
Recognizing the potential of this group, the report suggests that even a modest 1% allocation recommendation for Bitcoin would result in approximately $50 billion in inflows.
Drawing a parallel with precious metals ETFs boasting an estimated $120 billion in market capitalization, and assuming that between 10-20% of precious metal ETF investors explore a Bitcoin ETF as a diversification tactic against monetary debasement and inflation hedges, the potential influx into the Bitcoin ETF could reach a significant $12-24 billion.
The report speculates on the implications for Tether’s market capitalization by looking at the potential impact of BlackRock’s Bitcoin ETF approval.
Acting as a proxy for potential ETF inflows, a $24 billion increase in Tether’s market cap could conservatively push Bitcoin’s price to $42,000. With an even larger influx of $50 billion resulting from a 1% allocation by RIAs, Bitcoin could rally to $56,000.
Overall, Matrixport’s analysis sheds light on the potential ripple effects of Bitcoin ETF approval, extending beyond Bitcoin’s immediate market and encompassing Tether and the wider cryptocurrency landscape.
As market participants eagerly await regulatory decisions, the industry remains poised for potential growth and transformation.
As of the time of writing, the leading cryptocurrency in the market, Bitcoin (BTC), is trading at $28,700, reflecting a 1.8% increase over the past 24 hours.
It is worth noting that BTC has successfully maintained the gains it has made since mid-September. During this period, the cryptocurrency broke its short-term downtrend structure after reaching its peak for the year at $31,800 on July 13.
Featured image from Shutterstock, chart from TradingView.com
The impending meeting of the Federal Reserve on July 26th is highly likely to culminate in a further increase of 25 basis points (bps) to the interest rate, as suggested by a formidable 99.8% probability. Presently, the target rate is positioned between 500-525 bps, and this forecasted adjustment is set to raise the federal funds rate to span from 525-550 bps.
Moreover, the Federal Reserve’s meeting slated for September 20th is also garnering significant attention. Current projections indicate an 18% chance of an extra rate hike at this juncture, a probability that appears to be on an upward trajectory.
Across the Atlantic, the European Central Bank (ECB) is scheduled to deliver its decision a day following the Federal Reserve’s verdict. The signs also point towards a 25 bps rate hike, set to augment their current interest rate to 425 bps.
The post Further interest hikes anticipated going into late summer appeared first on CryptoSlate.