A Perfect Storm? The BTC rally is taking place against the backdrop of impressive inflows into BTC spot ETFs (daily +$500-650 million) – liquidity is moving into spot ETFs. If this continues, BTC can easily beat historical highs by next month.
QCP Capital predicts that Bitcoin’s price could surge to new all-time highs by the end of March, driven by significant inflows into Bitcoin ETFs and bullish derivative calls.
Several key factors support these forecasts:
Bitcoin ETF Inflows
The launch of spot Bitcoin ETFs has attracted billions of dollars, with daily inflows reaching unprecedented levels. On Wednesday, the cryptocurrency market crossed the $2 trillion mark, reaching its highest since April 2022. Bitcoin alone gained nearly 3% in the last 24 hours.
For instance, BlackRock’s iShares Bitcoin ETF alone attracted around $500 million in a single day earlier this week. QCP Capital reports that these ETFs receive an average daily acquisition of 10,000 to 13,000 BTC, indicating a strong institutional interest in Bitcoin.
Bullish Derivative Calls
There has been a surge in purchases of BTC call options, with premiums for options with strike prices ranging from $60,000 to $80,000. This indicates a bullish sentiment among investors, with nearly $10 million expended on call options expiring between April and December.
Mainstream Acceptance
Interestingly, big institutions like Fidelity have signaled a significant shift by allocating some of their conservative ETFs to cryptocurrencies. This mainstream acceptance of the crypto asset class is further evidenced by Bitcoin ETFs’ beginning to compete with traditional assets like gold.
US Equity Response
Plus, the resurgence in the US equity markets has supported the crypto market rally further. Despite facing selling pressure earlier due to unsatisfactory CPI data, Wall Street indices rebounded, with major tech giants leading the upward momentum. This positive momentum in the equity markets has spilled over into the crypto market, with Bitcoin extending its gains and trading at $52,431 at the time of writing.
However, looking at the downside, the market sentiment has shifted drastically, with a 91.5% probability of a rate pause next month, compared to expectations for a rate cut just one month ago. Looking ahead to May, traders foresee a 34% chance of a rate cut and a notable 63.3% likelihood of another rate pause, according to the CME FedWatch tool.
These factors contribute to a bullish outlook for Bitcoin, with QCP Capital anticipating new all-time highs by the end of March. This reflects growing investor confidence and positive sentiment in crypto and traditional markets.
