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February 27, 2024
PI Global Investments

Bitcoin Price’s Potential Surge to $112K Fueled by ETF Inflows

Hongji Feng

Last updated:

| 1 min read

Bitcoin price

Source: DALL·E

Bitcoin price could reach a new all-time high of $112,000 under the influence of significant inflows into spot Bitcoin exchange-traded funds (ETFs).

According to a recent report by CryptoQuant, the potential peak of $112,000 for Bitcoin’s price hinges on continued buying pressure from the influx of investments into spot Bitcoin ETFs. The analysis further outlined a “worst-case” scenario where Bitcoin could still see a rise to at least $55,000.

Bitcoin Price to Possibly Peak at $112,000

“Bitcoin market has seen $9.5B in spot ETF inflows per month, potentially boosting the realized cap by $114B yearly,” said CryptoQuant founder and CEO Ki Young Ju.

“Even with GBTC outflows, a $76B rise could elevate the realized cap from $451B to $527-565B,” said Ju.

Ju elaborated that historically, the Bitcoin market has shown a pattern where its lowest value points, or market bottoms, align with a Market Value to Realized Value (MVRV) ratio of 0.75, while market peaks coincide with an MVRV ratio of 3.9.

The MVRV ratio compares the market capitalization (the current market value of all mined Bitcoins) to the realized capitalization (the value of all Bitcoins at the price they were bought), serving as a key indicator for assessing Bitcoin’s valuation extremes.

The report indicated that if the current trends in Bitcoin ETF inflows continue, the MVRV ratio may reach levels that typically indicate a market peak, potentially pushing Bitcoin’s price to between $104,000 and $112,000.

However, without increased market hype and with the MVRV ratio at 2.07, Bitcoin’s price was expected to remain between $55,000 and $59,000.

Recent ETF Inflows and their Impact

Recent market activity provided a tangible example of the influence ETF inflows can have on Bitcoin price. At the time of writing, Bitcoin is currently trading at $48,129, 12.57% up from a week ago, according to CoinMarketCap.

the Bitcoin market has been significantly influenced by inflows into new spot Bitcoin ETFs, which have recorded $8 billion over 10 days of net gains. ETFs from BlackRock and Fidelity, namely the iShares Bitcoin Trust (IBIT) and Wise Origin Bitcoin ETF (FBTC), led these inflows with $2.6 billion and $2.2 billion respectively.

Additionally, the market is closely watching the anticipated Bitcoin halving event in April, expected to further drive Bitcoin’s price due to the reduced mining reward and ensuing scarcity.

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