July 20, 2024

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Potential $112K Bitcoin Price Increase Driven by ETF Inflows: CryptoQuant

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The price of bitcoin may rise to a record high of $112,000 if there are large inflows into spot exchange-traded funds (ETFs) for the cryptocurrency.

A recent analysis by CryptoQuant suggests that the price of Bitcoin might reach a top of $112,000, however this is dependent on ongoing purchasing pressure from the flood of money flowing into spot Bitcoin ETFs. A “worst-case” scenario in which Bitcoin might still grow to at least $55,000 was also detailed in the report.

Potential Peak for Bitcoin Price at $112,000

“Spot ETF inflows into the Bitcoin market have reached $9.5 billion per month, potentially increasing the realized cap by $114 billion annually,” stated Ki Young Ju, the CEO and founder of CryptoQuant.

“A $76 billion increase might push the market cap from $451 billion to $527–565 billion, even with GBTC outflows,” stated Ju.
According to Ju’s explanation, the Bitcoin market has historically displayed a pattern in which market peaks correspond with an MVRV ratio of 3.9 and lowest value points, or market bottoms, line up with an MVRV ratio of 0.75.

A crucial metric for evaluating the extremes of Bitcoin’s valuation is the MVRV ratio, which contrasts the market capitalization—the present market worth of all mined Bitcoins—with the realized capitalization, or the value of all Bitcoins at the purchase price.

According to the analysis, if the current patterns of inflows into Bitcoin ETFs persist, the MVRV ratio would rise to levels that usually signify a market top, which could drive the price of Bitcoin to between $104,000 and $112,000 in the process.

But with the MVRV ratio at 2.07 and no further market hype, it was anticipated that the price of Bitcoin would stay between $55,000 and $59,000.

Recent Inflows into ETFs and Their Effect

Recent trading action provide a concrete illustration of how ETF inflows might affect the price of Bitcoin. According to CoinMarketCap, as of this writing, the price of Bitcoin is $48,129, up 12.57% from a week ago.

Investments into newly established spot Bitcoin ETFs, which have seen net gains of $8 billion over the course of ten days, have had a major impact on the Bitcoin market. The iShares Bitcoin Trust (IBIT) and Wise Origin Bitcoin ETF (FBTC), two ETFs from BlackRock and Fidelity, topped these inflows with $2.6 billion and $2.2 billion, respectively.

The market is also keenly observing the planned April Bitcoin halving event, which is predicted to substantially boost the price of the cryptocurrency due to the decreased mining reward and resulting scarcity.

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