- If the Bitcoin spot ETFs keep gobbling up the crypto at the rate they started the year with, the top crypto will gain $8,000 monthly to end the year at $131,000, says one analyst.
- While all the ETFs have been recording inflows, GBTC has been bleeding heavily, but in recent days, its outflow pace has drastically reduced, leading to higher net inflows for the sector.
Bitcoin spot ETFs have been the biggest event in crypto this year, and according to one analyst, their impact could be monumental to the price of the top crypto. The analyst predicts that if they keep scooping up BTC at relatively the same rate, they could push its price to $131,000 by the end of the year.
At launch, the spot ETFs received massive investor interest, bringing in $858 million in their first two days. However, Grayscale started recording massive outflows as investors fled from the most expensive market offering. The outflows peaked on January 19th when GBTC lost $640 million.
However, as CNF reported, the outflows have slowed significantly over the past week. On February 2, the company only lost $144. In fact, in the past six days, the entire sector has recorded positive flows, peaking at $247 on January 30th.
According to analyst Thomas Young, the ETFs will be the biggest tailwind for Bitcoin and could push the crypto up by an average of $8,000 monthly. He based his analysis on the 118 multiplier introduced by the Bank of America in 2021. The bank observed that an injection of $93 million pushed BTC’s price 1% higher.
In March 2021, Bank of America introduced the concept of a ‘118 multiplier’ in relation to Bitcoin’s market behavior.
At that juncture, Bitcoin’s market capitalization stood at approximately $1.09 trillion, equating to a trading price of around $58,332 per unit. An analysis… pic.twitter.com/Cnpb2VjRZP
— Thomas Young (@tomyoungjr) February 1, 2024
Bitcoin to $131,000: How ETFs Are Changing BTC
As Young observed, on average, the ETFs are attracting over $150 million of BTC daily in new capital inflow. He then assumed a uniform spread for the rest of the year, with each month having an average of 22 trading days. Rather than apply the 118x multiplier by Bank of America, he went with a more conservative 50x. His results were a Bitcoin surge of at least $8,000 monthly.
He noted:
With these factors it is roughly $8K per month of upward price pressure leading to a $131K year end target. I would say $131K represents the lower bound of the forecast.
$131,000 is the lower estimate as applying Bank of America’s $118x multiplier projects BTC hitting around $300,000 by the end of 2024.
However, the multiplier is subject to changes in several variables, the analyst acknowledged. These include ” the volume of capital inflow; the velocity of these funds; the readily tradable supply of Bitcoin; and external factors influencing risk metrics within the broader market.”
As such, the 118x should be viewed as an evolving metric, reflective of the dynamic and fluid nature of Bitcoin’s market availability and investor behavior.
At press time, BTC is trading at $43,047 and has barely changed over the past day. It’s marginally higher over the past week, but its volatility has dropped significantly over the past month as accumulation continues.
