QCP Capital, a leading institutional-focused firm, recently designed that Bitcoin could revisit its peak price levels, potentially reaching as high as $74,000 soon.
This forecast follows the latest US Consumer Price Index (CPI) data, which has significantly boosted risk assets.
The company noted that the positive increase in the market is due in part to renewed demand on the buy side, as evidenced by the purchasing patterns which resemble those of exchange-traded fund (ETF) market makers.
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Institutional inflows and market indicators point to an upward trend for Bitcoin
In a detailed analysis shared via its Telegram channel, QCP Broadcast, the company stated: “We expect bullish momentum here this could take us back to the highs of 74k.”
Substantial institutional interest in Bitcoin supports this sentiment, as large asset managers like Millennium and Schonfeld have allocated around 3% and 2% of their assets under management (AUM), respectively, to spot BTC ETFs.
The optimism surrounding Bitcoin is not just theoretical, but supported by significant market activity. For example, inflows into US spot Bitcoin ETFs have reached a two week high of $303 million on May 15, signaling a robust renewal of institutional confidence.
Fidelity’s FBTC fund led this inflow with $131 million, followed by Bitwise’s BITB fund, which recorded $86 million, marking the highest amount since early March. Grayscale’s GBTC, which suffered outflows for four months, reversed that trend with a $27 million inflow.
Yesterday, May 15, the total net inflow of Bitcoin spot ETFs was $303 million. The Grayscale ETF GBTC had a single-day net inflow of $27.0466 million, the Fidelity ETF FBTC had an inflow of $131 million, and the Bitwise ETF BITB had an inflow of $86.2578 million. https://t.co/npjWVH3bMi
—Wu Blockchain (@WuBlockchain) May 16, 2024
Emphasizing this even further bullish sentimentMillennium Management holds a Bitcoin ETF portfolio of approximately $2 billion, making it the largest holder of specific Bitcoin ETFs such as BlackRock’s IBIT and Fidelity’s FBTC.
Other hedge funds, including Paul Singer’s Elliott Capital and Apollo Management Holdings, have also disclosed significant holdings in Bitcoin ETFs, showing growing institutional interest in Bitcoin.
Market performance and future prospects
Bitcoin market performance has been quite remarkable. It rose nearly 10% last week, including a 2.7% increase in just the last 24 hours.
QCP Capital attributes this trend to several factors, including significant “sovereign and institutional adoption, the easing of inflation concerns and the upcoming US elections,” all of which contribute to a favorable market outlook.
The positive sentiment is also due, in part, to CPI data released on May 15, which met expectations and eased concerns about inflation.
This is crucial as lower inflation rates influence the Federal Reserve’s interest rate decisions, making riskier assets like Bitcoin more attractive to investors seeking higher yields.
James Coutts, chief crypto analyst at Realvision, also cited the Global Money Supply (M2) index as a critical indicator of Bitcoin price movements.
According to Coutts, M2 monetary aggregates, which include cash and demand deposits and are easily convertible close to money, are fundamental to understanding liquidity flows in the global financial system.
He noted: “The money supply generally moves in one direction, with significant declines like those seen in 2022 being rare and typically brief.”
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Coutts predicts that any significant break above Bitcoin’s all-time highs could pave the way for it to reach around $150,000 this cycle. He commented: “Watch level 101/102 on DXY. If this breaks down, we should see around $150,000 BTC this cycle,” emphasizing the interplay between liquidity and market cycles.
Featured image from Unsplash, chart from TradingView