1 October 2024
In an analysis shared on X, Kelly Greer, Vice President of Trading at Galaxy Digital, presents a compelling argument for why the Bitcoin price could surge to as high as $118,000 by the end of the year. Greer’s insights are grounded in a combination of historical performance data, current market dynamics, and broader macroeconomic factors, all of which she believes are aligning to create a highly favorable environment for Bitcoin.
Here’s Why Bitcoin Could Skyrocket To $118,000
Greer begins by highlighting Bitcoin’s strong historical performance in the fourth quarter (Q4) of previous years. She pointed out that since 2020, Bitcoin’s average Q4 return to its intra-quarter high watermark has been approximately 85%. This figure includes a best-case scenario where the return reached a staggering 230%, and a worst-case scenario with a 12% decline.
“BTC average Q4 return (to max [intra quarter high watermark, full q return]) since 2020 is +85% (worst -12%, best +230%)—press you to find a stronger asymmetry,” Greer writes. This statistical asymmetry suggests a significant potential upside compared to the downside, making Q4 historically a period of robust growth for Bitcoin.
A merely average Q4 with a price increase of 85% could mean a year-end price of $118,000 for Bitcoin. If the BTC outperforms its record of 230%, the price could even rise well above $200,000.
Notably, Greer believes that the current market is not fully positioned to take advantage of this potential. She attributes this underallocation to a few key factors. Firstly, there is apprehension surrounding the upcoming US presidential election scheduled for November 5. Secondly, other assets such as gold and China’s A-shares are attracting significant attention and capital, potentially diverting investment away from Bitcoin.
“I still don’t think the market is allocated accordingly—2024 is a unique case where some portion of the market is underindexing on the Q4 asymmetry due to a) Nov 5 US election risk and/or b) other assets are screaming (gold, China A-shares etc.),” Greer remarks.
Key Reasons To Be Bullish On BTC
To support her assessment of the market’s current positioning, Greer cites her interactions with risk managers and noted specific market indicators. She mentioned observing “low volatility and contained perp funding,” which suggests that traders are not aggressively betting on significant price movements.
Beyond these market dynamics, Greer identifies several macroeconomic and industry-specific factors that she believes are creating a “broadly very positive” backdrop for Bitcoin. One significant point is the presence of global stimulus measures in major economies such as the United States and China, excluding Japan.
Greer also highlights that BNY Mellon, the world’s largest custodian bank, received a SAB 121 exemption. This exemption allows the bank to offer custody services for Bitcoin without the stringent capital requirements that previously made such services less attractive. Greer describes this development as “massive and underappreciated,” noting that it will “loosen financing in our industry substantially.”
Furthermore, Greer points out that ETF flows have become “very constructive.” Over the past few days, spot BTC inflows have reaccelerated massively. Last Friday, net flows were $494.8 million, making it the highest net inflow day of the quarter and the highest net inflow day since June 4th.
Another positive indicator is that Bitcoin miners are entering agreements with hyperscalers—large-scale cloud service providers. These partnerships can enhance mining efficiency and reduce operational costs.
Greer also mentions that “supply overhangs [are] mostly done,” suggesting that large sell-offs that could suppress the price are unlikely in the near term. Additionally, she anticipates that “demand from FTX cash distros [is] around the corner,” implying that funds distributed from the FTX exchange could find their way into Bitcoin investments, further boosting demand.
However, Greer also acknowledges potential risks that could impact Bitcoin’s trajectory. These include signals from the Federal Reserve regarding monetary policy and the possibility of a pullback in equity markets. Such events could introduce volatility or dampen investor enthusiasm.
However, she believes that the overall sentiment remains positive. “There are risks of course—Fed signaling, equities pullback, what have you—but net net vibes are quite good, and flows are just getting started,” she remarks.
Greer also describes Bitcoin as a “reflexive asset.” She explains, “BTC is the ultimate reflexive asset: price -> flows -> price.” This means that as the price of Bitcoin increases, it attracts more investment flows, which in turn push the price even higher—a self-reinforcing cycle.
Greer notes that Bitcoin is entering Q4 after breaking a key price level at $65,000. If the price were to reclaim the $70,000 mark, she expects that the inflows would accelerate as investors respond to the positive momentum and recall the strong Q4 performances of previous years.
At press time, BTC traded at $63,947.