Matrixport, a leading cryptocurrency financial services platform, has expressed unwavering confidence in the upward trajectory of Bitcoin and other cryptocurrencies in 2024, irrespective of the US Securities and Exchange Commission’s (SEC) decision on approving spot Bitcoin exchange-traded funds (ETFs).
As the crypto community eagerly awaits the SEC’s verdict on the spot Bitcoin ETFs, Matrixport emphasizes the importance of understanding macroeconomic factors, liquidity considerations, and the overall market structure when predicting the evolution of cryptocurrency markets.
The report notes that cryptocurrencies often face challenges in low liquidity environments, as witnessed in 2022. However, the tide turned in 2023 when expectations shifted towards an abundance of liquidity, leading to a resurgence in BTC prices. Federal Reserve Chairman Jerome Powell’s recent declaration of victory in the fight against inflation and discussions on potential interest rate cuts have further fueled optimism.
Matrixport points to historical data, highlighting that during the Fed’s previous decision to maintain interest rates in 2019, Bitcoin prices surged by nearly 300%. Despite the Fed projecting three cuts in 2024, there remains a substantial gap between inflation and interest rates, potentially driving more capital towards risk assets like stocks and crypto.
The report references Matrix on Target’s inflation model, which accurately predicted a sharp decline from 8% to 3-4% by the end of 2023. This model instilled confidence in Matrixport that risk assets, including cryptocurrencies, would experience a significant rally in 2023. Even if the SEC maintains its disapproval of Bitcoin Spot ETFs in January 2024, Matrixport anticipates higher crypto prices throughout the year.
Daily Monitoring Of Bitcoin Dominance
Crypto investors are advised to closely monitor the Bitcoin dominance chart, with a declining indicator possibly signaling an imminent Altcoin rally. With assets in US money market funds doubling since the onset of COVID, Matrixport highlights the potential inflow of funds into risk assets, such as stocks and crypto.
The report concludes by highlighting the favorable factors for 2024, including the upcoming Bitcoin halving, historical election year trends, and the potential economic boost from the re-election of former President Donald Trump. Matrixport suggests that these factors collectively contribute to a bullish outlook for BTC and cryptocurrencies in the coming year.
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