The current rally on Bitcoin caught the attention of many people. According to Chinese cryptocurrency journalist and blogger Colin Wu, Matrixport’s head researcher Markus Thielen thinks Bitcoin can easily hit $45,000 by the end of the year. Let’s have a look at why it may be possible.
$45,000 per Bitcoin soon?
Markus Thielen’s post on LinkedIn claims that the current Bitcoin price is right where it ought to be. Thielen believes that “the higher path to $45,000 this year will continue” and that now is a good time to acquire Bitcoin at a fair value of $27,000.
He believes that inflation will likely offer a strong tailwind for risk assets, including Bitcoin because US 10-year bonds are now trading below the 3.5% mark. This prediction is based on their CPI/FOMC road map laid out in February.
CPI/FOMC chart, source: linkedin.com
Thielen also pointed out that the volatility index (VIX) has begun trading below 20, which could be a great setup for a slow summer where prices could slowly move higher. Moreover, he suggested Bitcoin is not over nor under-valued according to the Fear & Greed index, expecting Bitcoin to continue to $45,000. Anyhow, the struggles of the First Republic Bank could drive Bitcoin higher.
More bank collapses ahead?
When Silvergate, Silicon Valley Bank along with other large banking institutions blew up, Bitcoin skyrocketed. Now we’re seeing similar troubles with the First Republic, whose stock trading was halted due to high volatility.
Needless to say that this stock is down 95% so far this year while Bitcoin is up around 75%. Other bank collapses or even just troubles could drive Bitcoin even higher in the upcoming months.
Whales continue to grow rich
According to this blog, the number of Bitcoin addresses continues to rise despite all uptrends or downtrends. More Bitcoin millionaires (people who hold at least $1 million worth of BTC) are created with each market increase. Only this year alone, over 50,000 Bitcoin millionaires have been created.
That doesn’t necessarily mean they are buying as much Bitcoin as possible, but they are definitely not selling. With Bitcoin around $30,000, there are more than 80,000 Bitcoin millionaires. This number could drastically surge with the halving event that takes place in about a year.
Bitcoin is most likely to continue upward, but investors need to be careful with approaching May, which is historically not a good month for risk-on assets. However, those who think long-term may not be intimated by short-term fluctuations and can reap the benefits of investing in Bitcoin in probably one or two years.