QCP Capital, a prominent institution-focused firm, recently projected that bitcoin could reach its peak price levels again, potentially reaching as high as $74,000 soon.
This prediction follows the latest US Consumer Price Index (CPI) data, which has significantly boosted risk assets.
The firm noted that the positive rise in the market is due in part to renewed buying demand, as evidenced by buying patterns that resemble those of exchange-traded fund (ETF) market makers.
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Institutional Inflows and Market Indicators Point to an Uptrend for bitcoin
In a detailed analysis shared via its Telegram channel, QCP Broadcast, the company stated: “We expect bullish momentum here that could take us back to the 74k highs.”
Significant institutional interest in bitcoin supports this sentiment, as large asset managers such as Millennium and Schonfeld have allocated around 3% and 2% of their assets under management (AUM), respectively, to spot btc ETFs.
The optimism surrounding bitcoin is not just theoretical but is backed by significant market activity. For example, inflows into US spot bitcoin ETFs reached a maximum of two weeks of $303 million as of May 15, indicating a solid renewal of institutional trust.
Fidelity's FBTC fund led this influx with $131 million, followed by Bitwise's BITB fund, which took in $86 million, its highest level since early March. Grayscale's GBTC, which had been experiencing outflows for four months, reversed this trend with an inflow of $27 million.
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Yesterday, May 15, total net bitcoin spot ETF inflows were $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) twitter.com/WuBlockchain/status/1790956976119378373?ref_src=twsrc%5Etfw” target=”_blank” rel=”nofollow”>May 16, 2024
To further underline this bullish sentiment, Millennium Management owns a bitcoin ETF portfolio of approximately $2 billion, making it the largest holder of specific bitcoin ETFs such as 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, showing the growing institutional interest in bitcoin.
Market performance and future prospects
The performance of the bitcoin market has been quite remarkable. It has risen almost 10% over the last week, including a 2.7% increase 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 election,” all of which contribute to a favorable market outlook.
The positive sentiment is also partly due to CPI data released on May 15, which met expectations and eased concerns about inflation.
This is crucial as lower inflation rates influence the Federal Reserve's interest rate decisions, making riskier assets like bitcoin more attractive to investors seeking higher returns.
James Coutts, chief crypto analyst at Realvision, also cited the Global Money Supply (M2) index as a critical indicator of bitcoin price movements.
According to Coutts, M2 monetary aggregates, which include cash and demand deposits and are easily convertible into money-like forms, are critical to understanding liquidity flows within the global financial system.
He noted: “The money supply often moves in one direction, and significant declines like those seen in 2022 are rare and usually brief.”
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Coutts predicts that any significant break above bitcoin's all-time highs could pave the way for it to reach around $150,000 this cycle. He commented: “Look at the 101/102 level on DXY. If that breaks, then we should see ~$150k btc in this cycle,” emphasizing the interplay between liquidity and market cycles.
Featured image from Unsplash, chart from TradingView
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