The latest prediction shared by leading analysis firm IntoTheBlock for Bitcoin (BTC) is quite remarkable. According to the report, the probability of BTC reaching its all-time high within the next six months is estimated at 85%. Behind this claim are a number of positive factors for Bitcoin, the largest crypto asset in terms of market capitalization.
First of all, the Bitcoin halving event, which will take place in April, stands out as an important catalyst. This event will result in mining rewards being reduced by half, which could lead to a decrease in supply and potentially an increase in demand. BTC miners are thought to be prepared for the effects of this throttling. Lucas Outumuro, head of research at IntoTheBlock, said:
“Therefore, along with continued specialization in miner equipment, we predict that Bitcoin will reach its all-time high just one month after the halving.”
The second important factor is new inflows from Bitcoin exchange-traded funds (ETFs). Providing access to crypto assets by institutional investors using these funds can increase the liquidity of BTC and affect its price upwards. Considering that recently approved ETFs have brought billions of dollars of new capital flowing into the market, the potential for this factor to increase the value of BTC is quite high.
“This could lead to increased demand for Bitcoin, while reduced supply issuance after the halving could lead to a potentially explosive dynamic for the Bitcoin price.”
Third, the expectation that the Federal Reserve will lower interest rates should be taken into account. Lowering interest rates may reduce the returns on traditional assets while increasing demand for alternative investment instruments. An asset with a limited supply, such as BTC, can attract the attention of investors with increased liquidity after interest rates are lowered.
“Whether it occurs in March or late summer, predicted interest rate declines are priced in and markets are on the rise. “As interest rates begin to fall, it will become cheaper to borrow money and provide more liquidity to financial markets, which will ultimately benefit Bitcoin and stock prices.”
As a fourth catalyst, the impact of the US presidential election should be considered. Outumuro said the Fed could take steps to make the economy look good ahead of the event.
“With the presidential election due in November 2024, there is an implicit incentive for the Fed to support the economy to increase Biden’s re-election chances.”
Finally, it should also be noted that companies around the world are starting to accumulate Bitcoin. With the increasing interest of major technology companies, financial institutions, and even traditional companies in crypto assets, Bitcoin’s long-term demand may increase and support its price.
“With spot ETFs now making it easier than ever for Wall Street to access Bitcoin, more hedge funds are likely to accumulate Bitcoin in the coming quarters… A growing number of companies in Asia and South America have adopted Bitcoin for some of their assets . “Now that the ETF has legitimized Bitcoin in the US, this model could expand nationally.”
You can follow the current price movement here.
