Bitcoin price up to $112,000 thanks to ETFs

Recently, CryptoQuant has published a hypothesis stating that the price of Bitcoin could reach up to $112,000 by 2024 thanks to ETFs.

According to this hypothesis, the maximum price of BTC during 2024 could be between $55,000 and $112,000. 

The realized cap of Bitcoin

This hypothesis was published yesterday on X by the founder and CEO of CryptoQuant, Ki Young Ju, who is also an on-chain analyst.

This is a hypothesis based on the trend of the so-called realized cap, which is the estimate of the total cost of purchasing all existing BTC. This parameter is obtained by multiplying the price of each individual Satoshi at the time of its last on-chain transaction. 

The realized cap chart of Bitcoin currently indicates a value of about 451 billion dollars, corresponding to an average purchase price of $23,000.

Note that the maximum level ever reached by this parameter is 467 billion dollars, reached in April 2022 before the collapse of the crypto markets due to the implosion of Terra/Luna. 

This is not a parameter that depends on the price of Bitcoin at the time of calculation, but on the price of BTC at the time of the last on-chain movement. Since most BTC either rarely moves or moves very little on-chain, it is a data that measures the past and not the present. 

For example, at the beginning of November 2021, when the price of Bitcoin reached its all-time high, its realized cap only managed to rise above 450 billion dollars, which is a value in line with the current one.

Later, it rose to 464 by early December, and starting from May 2022, it began to decline until reaching a minimum during the bear market following 379 billion in January 2023.

The recent increase, which started in October 2023, indicates that at the end of the year there were many purchases, most likely at a price higher than $30,000. 

ETF spot: The hypothesis of CryptoQuant’s CEO on the price of Bitcoin

Ki Young Ju identifies two lines, the possible maximum price line and the possible minimum price line. 

At this moment the possible maximum price would be just below $90,000, while the minimum price would be above $17,000. 

Projecting these data for the rest of the year, the maximum price could rise to $112,000, according to Ki Young Ju, who also indicates another figure ($55,000) as a lower reference, still regarding the maximum price. 

Note that in the chart elaborated and published by the CEO of CryptoQuant, already four times after the first Bitcoin halving in November 2012, the price has touched the red line of the maximum price. This is why he argues that it could even reach $112,000.

In fact, it happened twice in a single year in 2013, in April and December, while in 2017, between May and December, the price was almost always around the red line of the maximum price. In 2021, however, it only reached it in April, because in November it remained slightly below. 

The hypothesis is that something similar could happen again after the April halving.

The role of ETFs on the price of Bitcoin 

The difference compared to the past is that in this year of the fourth halving, there are Bitcoin spot ETFs on the US stock exchanges that had never been present before. 

Since January 11, the day they landed on the markets, they have overall recorded significant inflows of new capital, so the hypothesis is that these inflows may continue to arrive throughout the rest of the year, resulting in an increase in the price of BTC.

According to Ki Young Ju’s projections, if these inflows were to continue throughout 2024, the price of Bitcoin should reach a minimum of $55,000, while according to the previous estimate, the maximum should be $112,000.

From here the fork mentioned above. 

The hypothesis is that, given the $9.5 billion in net inflows per month so far observed on the new ETFs, a total of $76 billion in new capital could arrive, potentially bringing the realized cap above $527 billion, possibly up to $565 billion. This means a price higher than $55,000 or even $60,000.

If more were to arrive, since outflows from the Grayscale ETF are decreasing, the potential would be even higher, with a maximum hypothesis ranging from $104,000 to $112,000.

Grayscale’s optimism

This could be added to a certain dose of optimism that Grayscale itself is spreading. 

In this case, the hypothesis is that Bitcoin could experience a steady increase in prices after the halving due to the reduced selling pressure from miners and the new interest in some native Bitcoin-based applications, such as Ordinals. 

A few days ago, Grayscale published a report on its official website in which it considers some on-chain scenarios independent of ETFs. The picture that emerges is decidedly optimistic for this 2024, also regarding the basic activities of the Bitcoin ecosystem.

So it’s not just the financial markets that have a positive impact on BTC, but also the basic use of its technology, although mainly in the financial sector. 

These data seem to confirm the hypothesis of CryptoQuant’s CEO, and they also seem to support the long-standing hypothesis of a possible increase in the price of BTC in the year of the halving.