Bitcoin Price Soars Above Expectations, Analysts Predict Bullish Future
Analysts at Compass Point Research and Trading have attributed the recent surge in Bitcoin prices to several factors. These include a tighter supply of BTC coins, increased enthusiasm for the approval of spot BTC ETFs, and expectations of interest rate cuts in 2024. The analysts had initially predicted that Bitcoin would end 2023 at around $36,500, but the world’s largest digital coin closed the year above $42,000.
Looking ahead to this year, the analysts now forecast that Bitcoin prices will average $64,400 and end the year at $85,000. This is a significant revision from their previous forecast of $50,900 and $75,000, respectively. The analysts noted that the run-up in BTC prices ahead of the expected spot BTC ETF approvals in early January has exceeded their expectations, largely due to tighter coin supply than initially anticipated.
The analysts also highlighted the continued accumulation of coins by long-term, large-scale holders as a contributing factor to the price surge. They believe that these holders will continue to accumulate coins without selling, which could intensify after the ETF catalyst materializes. Additionally, the improved visibility into interest rate cuts is expected to support BTC prices, as interest rate cuts are likely to buoy all risk assets, particularly Bitcoin.
The analysts further noted that BTC prices tend to rise into halving events, and they anticipate some tailwinds ahead of the 2024 halving in April. They believe that the setup for 2024 is particularly bullish, given these dynamics, and there could even be upside to their outlook if ETF adoption is stronger than expected.
Looking even further into the future, Compass Point Research and Trading predicts that Bitcoin prices will average $103,500 in 2025 and end the year at over $120,000. This projection is based on the expectation that increased liquidity from interest rate cuts in late 2024 will continue to support risk assets. The analysts also anticipate continued adoption of BTC through spot ETFs as retail and institutional investors become more comfortable with the asset class. They also expect increased BTC adoption by US institutional investors.
However, the analysts acknowledge that their projection could be wrong if BTC fails to gain increased adoption, especially among institutional investors, or if economic conditions deteriorate. Despite these potential risks, Bitcoin price is currently trading at $46,487, reflecting the strong bullish sentiment in the market.
In conclusion, the recent surge in Bitcoin prices has exceeded analysts’ expectations, driven by factors such as tighter coin supply, anticipation of spot BTC ETF approvals, and expectations of interest rate cuts. The analysts have revised their forecasts for Bitcoin prices in 2023, 2024, and 2025, predicting a bullish future for the cryptocurrency. However, they caution that their projections are subject to potential risks, including a lack of adoption and unfavorable economic conditions.