Prominent pseudonymous crypto analyst DonAlt has shed light on two extreme scenarios that could shape the trajectory of Bitcoin. In a recent video for his YouTube channel, DonAlt explained the factors that could either propel Bitcoin to a staggering $60,000 or drag it down to $12,000.
The first scenario revolves around the possible approval of a spot Bitcoin ETF by the U.S. Securities and Exchange Commission (SEC). DonAlt believes that such a development could fuel a Bitcoin price surge of more than 100% from its current standing. While he doesn’t expect this dramatic increase to happen overnight, he indicates that a price range between $60,000 and $100,000 could become a reality in the wake of an ETF green light.
Expanding on the broader implications of an SEC-approved spot Bitcoin ETF, DonAlt pointed out that it would fundamentally alter the crypto landscape. The endorsement from the U.S. government would offer a measure of legitimacy to the entire crypto market, he noted.
In contrast, the second scenario put forth by DonAlt explores the ramifications of a Binance collapse. According to the analyst, Bitcoin would only revisit its low levels from November 2022 if Binance, the world’s largest crypto exchange by trading volume, were to falter. Should this unfortunate event occur, DonAlt suggests that Bitcoin could plummet to around $12,000, which he views as the absolute bottom.
Moreover, DonAlt considers a price drop to $16,000 improbable without a Binance failure. He finds the notion of Bitcoin falling to $20,000 to already be exceptionally low under current conditions, implying that any such downturn would likely be short-lived unless catalyzed by a catastrophic event like a Binance collapse.
In its 2023 outlook report released on 9 December 2022, crypto financial services platform Matrixport predicted a strong year for cryptocurrencies like Bitcoin and Ethereum, driven by factors such as reduced U.S. inflation and beneficial macroeconomic conditions. Matrixport also forecasted a noteworthy decline in market volatility for these cryptocurrencies.
According to a report by Matrixport published yesterday, the share price of Grayscale Investments’ Bitcoin Trust (GBTC) has shown a striking 167% year-to-date increase, outpacing Bitcoin’s own 71% growth. Matrixport noted that GBTC started the year with a net asset value (NAV) discount of -45%, which slightly improved to -43%. The landscape shifted substantially on 15 June 2023 when BlackRock applied for a Bitcoin ETF, as pointed out by Matrixport.
Matrixport has previously examined the U.S. Registered Investment Advisor (RIA) community, which oversees an estimated $5 trillion in assets. Matrixport says if this group allocates a modest 1% to Bitcoin, that could result in an inflow of about $50 billion. In addition, Matrixport suggested that if 10-20% of investors in precious metals ETFs diversify into a Bitcoin ETF, the market could see an additional inflow of $12-24 billion.
Concluding its assessment, Matrixport speculated that if BlackRock’s Bitcoin ETF is approved, and Tether’s market cap increases by $24 billion, the Bitcoin price might conservatively reach $42,000. Should there be a larger $50 billion influx from the RIA community, Matrixport predicts that Bitcoin’s price could potentially hit $56,000.
Featured Image via Midjourney