In the bustling world of cryptocurrencies, US markets are abuzz with expectations that Bitcoin will perform strongly in 2024. At the heart of this optimism is the expectation that a spot Bitcoin ETF will be approved by January 2024. However, Anthony Pompliano, a prominent figure in the cryptocurrency industry, said: Recently, a different perspective has been offered, sparking discussion among enthusiasts and investors.
Bitcoin ETF’s impact on the cryptocurrency market
in Detailed post, Pompliano analyzed the potential impact of a Bitcoin spot ETF on the market. Contrary to the generally optimistic sentiment, he claims that tens of billions of dollars inflows would boost the price by around 12%, based on Bitcoin’s current market value of $850 billion. However, this calculation does not paint the full picture.
He examines the liquidity issue further, noting that around 70% of all Bitcoins have remained stagnant for over a year. Given this liquidity crunch, he assumes that $100 billion inflows would represent a stunning 40% increase in Bitcoin’s free float market capitalization, which currently stands at around $255 billion.
Price prediction:
Pompliano acknowledges the growth potential but is maintaining a cautious stance. He argues that despite significant ETF inflows, the Bitcoin price is unlikely to reach its historic high of $69,000. Instead, he highlights other factors that could affect Bitcoin’s trajectory: the supply decline expected early in the second quarter and potential changes in central bank policy, particularly the Federal Reserve. Pompliano suggests that these factors could lead to a speculative rise in the value of assets such as Bitcoin.
conclusion:
Although Pompliano refrains from making specific price predictions, he expects Bitcoin’s value to rise significantly in the upcoming bull market. He acknowledges the complexity of investment forecasting and highlights the difficulties inherent in predicting the future of volatile assets such as Bitcoin. Ultimately, he highlights Bitcoin’s enduring appeal and ongoing blockchain transactions as the most trustworthy aspect of the cryptocurrency.