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In a analysis Posted via Bitcoin. As NewsBTC reported, Grayscale's GBTC outflows have slowed significantly recently, resulting in a consistent bottom line. influx over the last five consecutive days, ranging from $14.8 million to $247.1 million.
The concept of the multiplier 118
The core of Young's analysis relies on the concept of the “118 multiplier,” a metric introduced by Bank of America in March 2021. This multiplier posited that an investment inflow of approximately $92 million to $93 million was necessary to change the price of Bitcoin by 1%. At that time, the market capitalization of Bitcoin was approximately $1.09 trillion, which corresponds to a unit price of approximately $58,332.
Young's predictions revisit and modify this concept, emphasizing its non-static nature. He notes: “The multiplier is the result of several interacting variables, including the volume and speed of capital inflows, the supply of readily tradable Bitcoin, and external factors affecting risk measures in the broader market. » Thus, it is suggested that the 118x multiplier is a dynamic indicator rather than a fixed one.
Drawing on data from HODL15Capital, Young sees steady growth in Bitcoin ETFs, with an average inflow of 4,193 BTC per day. This translates to approximately $176 million in net new capital per day. For forecasting purposes, Young adjusts this figure to $150 million per day, spread evenly across the trading days of each month (typically 20 to 23 days).
Bitcoin Price Could Reach $131,000 By EOY
Applying a more conservative multiplier of 50x, as opposed to the original 118x or 100x, Young calculates an estimated monthly upward price pressure of $8,000 per Bitcoin. This calculation leads to an end-of-year price target of at least $131,000 for Bitcoin. Young says: “This $131,000 represents the lower bound of the forecast, recognizing that actual capital flow may not be uniform and other factors could increase the multiplier. »
The adjusted analysis also takes into account irregularities observed in January, including the one-time sale of GBTC. Young revised the January data to provide a more accurate representation of the trend for the remainder of the year. He suggests: “A rule of thumb: the average daily gain of BTC across all ETFs multiplied by $2 gives a conservative estimate of the price effect of ETF growth.
Based on this model, Young's monthly Bitcoin price forecast, assuming ETF inflows continue at the pace seen over the first 15 days, is as follows:
- January: $42,000
- February: $50,022
- March: $58,044
- April: $66,448
- May: $74,852
- June: $82,492
- July: $90,896
- August: $99,300
- September: $106,940
- October: $115,726
- November: $123,366
- December: $131,388
This meticulous analysis by Young not only highlights the potential impact of ETF inflows on the price of Bitcoin, but also highlights the complexity and dynamic nature of cryptocurrency markets. However, other events that affect supply and demand dynamics, such as the upcoming BTC halving, as well as macroeconomic developments (Fed rate cut), among others factors that make price forecasting incredibly difficult.
At press time, BTC was trading at $43,021.
Featured image of DALL·E, chart by TradingView.com
Disclaimer: The article is provided for educational purposes only. It does not represent the views of NewsBTC on whether to buy, sell or hold investments and, naturally, investing involves risks. You are advised to carry out your own research before making any investment decision. Use the information provided on this website entirely at your own risk.
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