BlackRock ETF demand could fuel a rally to $180,000

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Wenjin Chen/Getty Images The price of bitcoin could climb to $180,000 before the expected halving in April 2024, according to Fundstrat.

The price of bitcoin could climb 521% from current levels at $180,000 ahead of the cryptocurrency’s planned halving in April 2024, according to a Monday note from Fundstrat.

The investment research firm said that while daily bitcoin demand of around $25 million equates to daily mining rewards of around $25 million, that could change with the potential launch of a bitcoin ETF.

A bitcoin ETF could add an additional $100 million in additional daily demand for bitcoin, according to the memo. This increase, combined with the April 2024 halving that is expected to reduce daily mining rewards to $12 million, means the price of bitcoin would need to rise significantly to reach a balance between buyers and sellers.

“This [bitcoin ETF launch] would bring the daily demand to $125 million, while the daily supply is only $25 million. The implied equilibrium price would have to rise for the daily supply to match the daily demand. Equilibrium analysis suggests a clearing price is $140,000 to $180,000, before the April 2024 halving,” Fundstrat said.

The halving, also known as the halving, is considered bullish for bitcoin because halving the reward given to miners is a cap to limit the supply of bitcoins and has historically led to price increases.

In a note to clients earlier this month, Fundstrat’s head of digital asset strategy Sean Farrell explained that a multiplier effect in the range of 4.0x to 5.0x is reasonable to assume for the bitcoin network.

“That means a dollar of demand can lead to a $4 to $5 increase in market capitalization,” Farrell said.

Farrell sees a 75% chance that a spot bitcoin ETF will be approved in the short term, as a number of companies, including BlackRock and Fidelity, await news from the SEC on their filings.

“We anticipate [a bitcoin ETF] would attract new investors and generate increased demand for bitcoin,” Farrell said.

And if approved, a bitcoin ETF from BlackRock could lead to one of the biggest ETF launches on record, Fundstrat said, adding that it could ultimately beat record holder Invesco QQQ ETF in its first year of inflows. The QQQ ETF, which tracks the Nasdaq 100, attracted $36 billion in inflows in its first year after launching in March 1999.

Fundstrat said Bitcoin ETFs could eventually eclipse the precious metals ETF market, which holds nearly $230 billion in assets.

“Bitcoin ETF could eventually become a >$300 billion category,” Fundstrat said. And this surge in demand is what could help put a triple-digit price on bitcoin.

Fundstrat isn’t the only company with a price target of over $100,000 for bitcoin. Earlier this month, Standard Chartered said a positive feedback loop could propel the cryptocurrency past $120,000 next year.

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