In the bustling world of cryptocurrency, the U.S. market is abuzz with expectations of Bitcoin turning bullish in 2024. Central to this optimism is the anticipation of spot Bitcoin ETF approvals by January 2024. However, Anthony Pompliano, a renowned figure in the crypto industry, recently presented a differing viewpoint, sparking discussions among enthusiasts and investors.
In a detailed post, Pompliano dissected the potential impact of a Bitcoin spot ETF on the market. Contrary to the common bullish sentiment, he argues that an influx of tens of billions of dollars would result in a modest 12% price increase, based on Bitcoin’s current market valuation of $850 billion. This calculation, however, does not paint the full picture.
He further delves into the liquidity issue, pointing out that about 70% of all Bitcoin has remained static for over a year. Considering this liquidity crunch, he posits that a $100 billion influx would represent a staggering 40% rise in Bitcoin’s liquid market capitalization, which currently stands at approximately $255 billion.
While acknowledging the growth potential, Pompliano maintains a cautious stance. He contends that even with significant ETF inflows, Bitcoin’s price is unlikely to reach its historical peak of $69,000. Instead, he highlights other factors that could influence Bitcoin’s trajectory: the anticipated supply halving in early Q2 and potential shifts in central bank policies, especially by the Federal Reserve. These elements, Pompliano suggests, could lead to a speculative rise in the value of assets like Bitcoin.
Conclusion:
Pompliano refrains from giving a specific price forecast but anticipates a significant upswing in Bitcoin’s value in the coming bull market. He acknowledges the complexity of investment predictions, emphasizing the inherent challenges in forecasting the future of a volatile asset like Bitcoin. Ultimately, he highlights Bitcoin’s enduring appeal and the continuous blockchain transactions as the cryptocurrency’s most reliable aspects.
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