According to Markus Thielen, head of research at Matrixport and founder of analytics portal DeFi Research, the growing demand for the so-called bullish bets, especially among market makers, could drive significant growth for Bitcoin.
“Bitcoin will reach $40,000 – if not even $45,000 – by the year’s end,” Thielen told CoinDesk. “ We have two colossal options expiring on Nov 24 and Dec 29 with $3.7 billion and $5.4 billion open interest outstanding. The closer we get to $40,000, the more people will have to buy bitcoin to hedge themselves”, he added.
Another factor supporting the bullish scenario is the US’s decreasing inflation rate and expectations of interest rate cuts or liquidity easing by the Federal Reserve (Fed).
The inflation rate has shown signs of slowing down in recent months, compared to the peak of 9.1% in June last year. According to UBS, inflation cooling down means the Fed could halve its benchmark interest rate to 2.75% from the current range of 5.25% – 5.5%.
“The U.S. inflation headline CPI is currently at 3.2% while interest rates are at 5.25% – a difference of 2.0%. If our inflation model is current, then this spread would even be 3.0% – so we could expect 200 basis points of rate cuts next year. This is bullish”, said Thielen.
Finally, the optimism about spot ETFs of Wall Street financial firms could be a catalyst for Bitcoin’s bullish. Bloomberg researchers said there is a 90% chance that the SEC will approve 1 or more spot ETFs before January 10. Bitcoin is trading at $36,383 on CoinMarketCap.
