In a analysis shared on Greer’s insights are based on a combination of historical performance data, current market dynamics and broader macroeconomic factors, all of which she believes are aligning to create a highly favorable environment for Bitcoin.
Here’s Why Bitcoin Could Skyrocket to $118,000
Greer begins by highlighting Bitcoin’s strong historical performance in the fourth quarter (Q4) of previous years. She highlighted that since 2020, Bitcoin’s average Q4 return to its intra-quarter cap has been approximately 85%. This number includes the best-case scenario, where the return reached an impressive 230%, and the worst-case scenario, with a 12% decline.
“Average BTC Q4 return (up to maximum (intra-quarter high-water mark, full q return)) since 2020 is +85% (worst -12%, best +230%) – press you to find a stronger asymmetry,” writes Greer. This statistical asymmetry suggests significant potential upside compared to the downside, making Q4 historically a period of robust growth for Bitcoin.
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A merely average fourth quarter with an 85% price increase could mean a year-end price of $118,000 for Bitcoin. If BTC surpasses its all-time high of 230%, the price could even rise well above $200,000.
Notably, Greer believes the current market is not fully positioned to take advantage of this potential. She attributes this underallocation to a few key factors. Firstly, there is apprehension surrounding the upcoming US presidential elections scheduled for November 5th. Second, other assets such as gold and China A-shares are attracting significant attention and capital, potentially diverting investment away from Bitcoin.
“I still don’t think the market is allocated accordingly – 2024 is a unique case where some part of the market is under-indexed on Q4 asymmetry due to a) November 5 US election risk and/or b) other assets are screaming (gold, Chinese A shares, etc.)”, comments Greer.
Top reasons to be bullish on BTC
To support his assessment of current market positioning, Greer cites his interactions with risk managers and observed specific market indicators. She mentioned observing “low volatility and contained criminal financing,” which suggests traders are not aggressively betting on significant price movements.
In addition to these market dynamics, Greer identifies several macroeconomic and sector-specific factors that she believes are creating a “broadly very positive” outlook for Bitcoin. A significant point is the presence of global stimulus measures in major economies such as the United States and China, excluding Japan.
Greer also highlights that BNY Mellon, the largest custodian bank in the world, received a SAB 121 exemption. This exemption allows the bank to offer Bitcoin custody services without the stringent capital requirements that previously made such services less attractive. Greer describes this development as “huge and underappreciated,” noting that it will “substantially loosen funding in our industry.”
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Furthermore, Greer points out that ETF flows have become “very constructive.” In recent days, BTC spot flows accelerated massively. Last Friday, net flows were US$494.8 million, making it the highest net inflow day of the quarter and the highest net inflow day since June 4.
Another positive indicator is that Bitcoin miners are entering into agreements with hyperscalers – large-scale cloud service providers. These partnerships can increase mining efficiency and reduce operating costs.
Greer also mentions that “oversupply (is) mostly resolved,” suggesting that large sales that could suppress the price are unlikely in the near term. Additionally, she predicts that “demand from the FTX cash distros (is) coming,” implying that ffunds distributed by the FTX exchange could find their way into Bitcoin investments, further increasing demand.
However, Greer also recognizes potential risks that could impact Bitcoin’s trajectory. These include signals from the Federal Reserve regarding monetary policy and the possibility of a downturn in equity markets. Such events may introduce volatility or dampen investor enthusiasm.
However, she believes the overall sentiment remains positive. “There are risks, of course – Fed signaling, pullback in stocks, whatever – but the net vibes are very good and the flows are just beginning,” she notes.
Greer also describes Bitcoin as a “reflective asset.” She explains: “BTC is the ultimate reflective asset: price -> flows -> price.” This means that as the price of Bitcoin increases, it attracts more investment flows, which in turn pushes the price even higher – a self-reinforcing cycle.
Greer notes that Bitcoin is entering the fourth quarter after breaking a key $65,000 price level. If the price reclaims the $70,000 mark, she expects inflows to accelerate as investors respond to the positive momentum and recall strong fourth-quarter performances from previous years.
At press time, BTC traded at $63,947.
Featured image created with DALL.E, chart from TradingView.com
