16 May 2024
QCP Capital, a prominent institutional-focused firm, has recently projected that Bitcoin could revisit its peak price levels, potentially reaching up to $74,000 shortly.
This prediction follows the latest United States Consumer Price Index (CPI) data, which has significantly boosted risk assets.
The firm noted that the positive surge in the market is partly due to the renewed buy-side demand, as evidenced by the buying patterns that resemble those of Exchange-Traded Fund (ETF) market makers.
Institutional Inflows And Market Indicators Point To A Bitcoin Bullish Trend
In a detailed analysis shared through their Telegram channel, QCP Broadcast, the firm stated: “We expect bullish momentum here that could take us back to the highs of 74k.”
Substantial institutional interest in Bitcoin supports this sentiment, as large asset managers like Millennium and Schonfeld have allocated about 3% and 2% of their Assets Under Management (AUM), respectively, to spot BTC ETFs.
The optimism surrounding Bitcoin is not just theoretical but backed by significant market activity. For instance, inflows into spot Bitcoin ETFs in the US reached a two-week high of $303 million as of May 15th, signaling a robust renewal of institutional confidence.
Fidelity’s FBTC fund led this influx with $131 million, followed by Bitwise’s BITB fund, which saw $86 million, marking its highest since early March. Grayscale’s GBTC, which had experienced outflows for four months, reversed this trend with a $27 million inflow.
Yesterday, May 15, the total net inflow of Bitcoin spot ETFs was $303 million. Grayscale ETF GBTC had a single-day net inflow of $27.0466 million, Fidelity ETF FBTC had an inflow of $131 million, and Bitwise ETF BITB had an inflow of $86.2578 million. https://t.co/npjWVH3bMi
— Wu Blockchain (@WuBlockchain) May 16, 2024
Further underlining this bullish sentiment, Millennium Management holds a roughly $2 billion Bitcoin ETF portfolio, making it the largest holder of specific Bitcoin ETFs like BlackRock’s IBIT and Fidelity’s FBTC.
Other hedge funds, including Paul Singer’s Elliott Capital and Apollo Management Holdings, have also disclosed significant holdings in Bitcoin ETFs, showcasing the growing institutional interest in Bitcoin.
Market Performance And Future Outlook
Bitcoin’s market performance has been quite notable. It has increased nearly 10% over the past week, including a 2.7% rise in the last 24 hours alone.
QCP Capital attributes this trend to several factors, including significant “sovereign and institutional adoption, easing inflation concerns, and the upcoming US elections,” all of which contribute to a favorable market outlook.
The positive sentiment is also partly due to the CPI data released on May 15th, which met expectations and eased concerns about inflation.
This is crucial as lower inflation rates influence the Federal Reserve’s decisions on interest rates, making riskier assets like Bitcoin more attractive to investors seeking higher yields.
James Coutts, Chief Crypto Analyst at Realvision, also cited the Global Money Supply (M2) index as a critical indicator of Bitcoin’s price movements.
According to Coutts, the M2 money aggregates, which include cash and checking deposits and are easily convertible near money, are central to understanding liquidity flows within the global financial system.
He noted, “The money stock often moves in one direction, with significant drops like those seen in 2022 being rare and typically brief.”
Coutts predicts that any significant break above Bitcoin’s all-time highs could pave the way for it to reach around $150,000 in this cycle. He remarked, “Watch the 101/102 level on DXY. If that breaks, then we should see ~$150k BTC this cycle,” emphasizing the interplay between liquidity and market cycles.
Featured image from Unsplash, Chart from TradingView