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Bitcoin has more to rip says Galaxy as analysts see new record in ‘matter of weeks’

Bitcoin has more to rip says Galaxy as analysts see new record in ‘matter of weeks’
Snapshot
Bitcoin cut hit new records in a matter of weeks and might reach $120,000 this year. Credit: Shutterstock / Alf Ribeiro
By
T. Pearson, A. McCarthy
29 February 2024 at 16:49
  • Bitcoin’s rally has more room to go, according to Galaxy’s head of research.
  • The digital asset could rise to $120,000 by the end of the year, analysts say.

Bitcoin’s rally won’t run out of steam any time soon, analysts say, as the digital asset soared more than 21% in the past seven days.

From spot Bitcoin exchange-traded funds to the upcoming halving, here are the reasons why Galaxy analysts say that this Bitcoin rally is “different.”

Spot Bitcoin ETFs

The success of spot Bitcoin ETFs has driven better sentiment in crypto markets.

Retail investors have also returned to crypto after lows of $16,000 in 2022, JPMorgan also said on February 23.

Bitcoin’s latest rally catapulted it above $63,000 for the first time since November 2021. It has more room to go, according to Galaxy Digital CEO Mike Novogratz.

Galaxy’s head of research agrees.

“Bitcoin is awake,” Alex Thorn said in a note to clients on Wednesday.

Bitcoin ETFs have ushered in a new era for the digital asset, Thorn told clients, pointing out that the price of Bitcoin typically rises after its so-called halving, not before.

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Halving

The halving happens automatically once every four years and reduces the amount of new Bitcoin that can be created by miners.

The digital assets’ next halving is expected to happen in mid-April and it will reduce the amount of Bitcoin paid to miners to 3.125 from 6.25 Bitcoin.

The supply-side shock caused by the halving can be dramatic. Bitcoin’s price soared over 600% following its previous halving in 2020.

While there have only been three halvings, and Bitcoin is “still young by the standards of any asset class,” this has raised some concerns among market participants that Bitcoin is “speedrunning the ‘cycle’ this time around,” Thorn said.

“This time is different. The advent of Bitcoin ETFs in the United States is truly a monumental shift that will disrupt everything we know about Bitcoin price cycles,” Thorn said.

Not stopping

Long and short term holders possess around 75% of all Bitcoin supply at present, Galaxy Research data shows.

That is “nowhere near what we’ve seen in prior cycles,” Thorn said.

This data and activity by large institutional investors on the CME suggests the rally has not peaked yet, Thorn concluded.

During previous bull runs record highs have coincided with highs in Bitcoin futures open interest — the number of outstanding futures contracts.

Those markets were dominated by exchanges outside of the US, but that dynamic has changed.

“Today, CME dominates and traders must post cash. And you have big market players now – such as the authorised participants for the Bitcoin ETFs – that are using futures to hedge rather than for leverage,” Thorn said.

Basically, there is less risk from over leveraged traders.

Six-figure Bitcoin

Analysts at crypto exchange Bitfinex also said that Bitcoin could move higher.

The “conservative” price target for Bitcoin by the end of 2024 is between $100,000 and $120,000, Bitfinex analysts said in a report on Wednesday.

Bitcoin could reach “a new all-time high within a matter of weeks,” Bitfinex analysts said, and the “cycle peak” is likely to be in 2025.

“The fact we now have ETFs potentially means that any decline following the top of the current cycle could be less drastic than previous downturns,” Bitfinex’s report said.

Crypto market movers

  • Bitcoin added 1.1% since Wednesday, trading around $62,450.
  • Ethereum traded at $3,450 up 1.4%.

What we’re reading

Adam Morgan McCarthy is a markets correspondent at DL News. Tyler Pearson is a junior markets correspondent at DL News. Got a hot tip? Reach out to them at adam@dlnews.com or ty@dlnews.com.