Analysts at Compass Point Research and Trading attributed the price surge to factors like a tighter BTC coin supply, increased enthusiasm for spot BTC ETF approvals, and expectations of interest rate cuts in 2024.
Analysts were looking for Bitcoin to end 2023 at about $36,500 while the world’s largest digital coin closed at above $42,000.
Looking forward to this year, analysts see Bitcoin prices averaging $64,400 and ending the year at $85,000. This compares to their previous forecast for $50,900 and $75,000, respectively.
“While our outlook for spot BTC ETF approvals in early January has remained our base case for several months now, the run up in BTC prices ahead of the event have outpaced our expectations due to even tighter coin supply than we initially expected,” analysts wrote.
They also added that “long-term, large-scale holders continued to accumulate coins without selling, which we believe will persist for the foreseeable future given how long-term holders have acted during prior bull cycles and could potentially intensify after the ETF catalyst materializes.”
Another factor that is supporting prices is the improved visibility into interest rate cuts, “which we expect to buoy all risk assets, but BTC in particular.”
“Furthermore, BTC prices tend to rise into halving events, so we expect at least some tailwinds ahead of the 2024 halving in April. We believe the set up for 2024 is particularly bullish given these dynamics and believe there could even be upside to our outlook, especially if ETF adoption is stronger than expected,” analysts also noted.
As far as 2025 is concerned, Compass Point Research and Trading sees Bitcoin prices averaging $103,500 and ending the year at over $120,000.
This projection is based on expectations that “increased liquidity from interest rate cuts in late 2024 will continue to buoy risk assets, bolstered by continued adoption of BTC via spot ETFs as retail and institutional investors get more comfortable with the newly accessible asset class, as
well as generally increased BTC adoption by US institutional investors in particular.”
On the other hand, their projection could go wrong “if BTC fails to gain increased adoption, whether via ETF or direct exposure, especially amongst institutional investors, and/or economic conditions deteriorate relative to our expectations.”
Bitcoin price is currently trading at $46,487.
Source: Cryptocurrency - investing.com
