It was a hot start to the week for the cryptocurrency market as expectations that the first spot Bitcoin (BTC) exchange-traded fund (ETF) could launch within the next couple of days put a bid under the top crypto, which spiked above $47,000 for the first time since April 3, 2022.
Stocks were also on the uptrend ahead of this week's highly anticipated Consumer Price Index (CPI) report, which will give investors a clue as to what the Federal Reserve may do regarding interest rates in the months ahead.
At the closing bell, the S&P, Dow, and Nasdaq finished higher, up 1.41%, 0.58%, and 2.20%, respectively.
Data provided by TradingView shows that an early morning attempt by Bitcoin bears to smash its price lower was rebuffed by bulls, who reversed its course and rallied the top crypto to a daily high of $47,330 in the afternoon, the highest price yet in the ongoing bull market. At the time of writing, BTC trades at $46,965, an increase of 6.25% on the 24-hour chart.
BTC/USD Chart by TradingView
“January Bitcoin futures prices [were] higher in early U.S. trading Monday and not far below the recent contract high,” said Kitco senior technical analyst Jim Wyckoff.
Bitcoin futures 1-day chart. Source: Kitco
“Bulls have the firm overall near-term technical advantage,” Wyckoff said. “However, a price uptrend on the daily bar chart has stalled out. Bulls need to show more power soon to revive the near-term price uptrend.”
The direction the market heads in the weeks and months ahead hinges in part on how the Securities and Exchange Commission (SEC) rules on the spot BTC ETFs the regulator is evaluating, with analysts at Bloomberg saying there is a 95% chance of approval.
In a Monday note to clients, Geoff Kendrick, head of FX research at Standard Chartered, said that the approval of a spot BTC ETF could result in a price increase of more than 300% for Bitcoin by the end of next year.
“If ETF-related inflows materialize as we expect, we think an end-2025 level closer to USD 200,000 is possible,” he said. “This assumes that between 437,000 and 1.32 million new Bitcoins will be held in spot US ETFs by end-2024. In USD terms, this should be roughly $50-100 billion.”
To determine this estimate, Kendrick cited the launch of the SPDR Gold Shares (GLD) ETF and how that fund affected the price of gold.
"When GLD was introduced in November 2004, the total stock of above-ground gold was worth around $2.2 trillion, compared with BTC’s current market cap of $0.86 trillion,” he said. “Adjusting the $88 billion of GLD inflows for relative market caps would suggest $34 billion of inflows to BTC ETFs,” as a lowball estimate.
On the high side, Standard Chartered expects $130 billion worth of inflows, and Kendrick said inflows in the range of $50-100 billion in 2024 “seems reasonable.”
The note said the potential approval of a spot BTC ETF is a “watershed moment” for normalizing Bitcoin participation by institutional investors and could lead to a sharp rise in price by the end of 2025.
Beyond that, Kendrick said BTC price could continue to appreciate, noting that the price of gold rose 4.3 times in the seven to eight years it took for gold ETP holdings to mature after GLD was introduced.
"We expect Bitcoin to enjoy price gains of a similar magnitude as a result of U.S. spot ETF approval, but we see these gains materializing over a shorter (one- to two-year) period, given our view that the BTC ETF market will develop more quickly,” he said. “This is consistent with our end-2024 view of Bitcoin at the $100,000 level.”
Henrik Zeberg, macroeconomic and financial analyst and author of the Zeberg Report, also sees 2024 as a breakout year for Bitcoin and the cryptocurrency market.
“It’s going absolutely ballistic. It’s going to go vertical,” Zeberg said during an interview on the Bloor Street Capital podcast. “I think we will reach at least $115,000, that’s my minimum target. I think $150,000 is also manageable, and I could also see $250,000, but I would not be surprised if it only reached $115,000.”
“I’m seeing a crypto run like nothing else,” he added. “Everybody who missed out on the first or second rounds will say, ‘I missed out on the first two rounds, I’m not missing out on this one.’ When we start to see Bitcoin move up above the current levels,” that’s when things will start to pick up, “especially if we see the approval of a spot BTC ETF.”
“I think that the structure tells me we could see a very quick move,” driven by people who missed out on the gains seen in the crypto and stock markets in 2023, he said. “I think the riskier assets, which include cryptos and even Bitcoin, will have a fantastic first four months of the year.”
Mixed day in the altcoin market
It was a mixed day for altcoins, with the top 200 tokens evenly split between winners and losers as the focus of the investing world was on Bitcoin.
Daily cryptocurrency market performance. Source: Coin360
Klaytn (KLAY) led the gainers with an increase of 37.8%, followed by Threshold (T), which gained 34.65%, and a 15.8% price increase for Internet Computer (ICP). Powerledger (POWR) was the biggest loser with a decline of 19.4%, while GMT (GMT) fell 16.25%, and Mask Network (MASK) lost 12%.
The overall cryptocurrency market cap now stands at $1.73 trillion, and Bitcoin’s dominance rate is 53.2%.
