CryptoQuant Founder Puts $112,000 Target For Bitcoin This Year
February 12 2024 - 7:00PM
NEWSBTC
The founder of on-chain analytics firm CryptoQuant has said Bitcoin
could reach a target of $112,000 this year driven by the ETF
inflows. Bitcoin May Hit $112,000 Based On Inflows Into The ETFs In
a new post on X, CryptoQuant CEO and founder Ki Young Ju talked
about the outlook of the cryptocurrency based on the inflows going
towards the spot exchange-traded funds (ETFs). The analyst has used
the “Realized Cap” indicator to find price targets for the coin.
The Realized Cap refers to a capitalization model for Bitcoin that
calculates the total valuation of the asset by assuming that the
real value of any coin in circulation is the price at which it was
last transacted on the blockchain. Related Reading: Dogecoin Out Of
Fashion? Volume & Whale Activity Plunges If the previous
transaction of any token is assumed to have involved a change of
hands for it (that is, buying and selling took place), then the
last transfer price would correspond to the cost basis of the coin.
As the Realized Cap essentially adds up the cost basis of all the
investors, one way to look at the metric is as a measure of the
total amount of investment the holders have put into the coin.
Naturally, the Realized Cap pushes up as trades occur at a higher
spot price. Something that could be particularly influential for
the Realized Cap this cycle may be the spot ETF inflows. The spot
ETFs, which finally got approval from the US Securities and
Exchange Commission (SEC) last month, have been buying up Bitcoin
at relatively high prices to add to their holdings, thus elevating
the Realized Cap. The chart below shows the data for the holdings
of the spot ETFs and the Bitcoin Realized Cap. The trend in the
spot ETF holdings and BTC Realized Cap | Source: @ki_young_ju on X
“Bitcoin market has seen $9.5B in spot ETF inflows per month,
potentially boosting the realized cap by $114B yearly,” explains
Ju. “Even with $GBTC outflows, a $76B rise could elevate the
realized cap from $451B to $527-565B.” The Market Value to Realized
Value (MVRV) ratio may provide some hints regarding how the
Realized Cap could be relevant for the spot price. This indicator
tracks the BTC Market Cap and the Realized Cap ratio.
“Historically, BTC market bottoms occur at an MVRV of 0.75 and tops
at 3.9,” notes the CryptoQuant founder. Based on this fact, the
table below shows that ceiling and floor prices can be defined for
the asset. The trend in the ceiling and floor prices for BTC based
on the Realized Cap | Source: @ki_young_ju on X As the spot ETF
inflows continue to come in, the Realized Cap will only push
further up, and the potential ceiling of the cryptocurrency will
also thus increase. Zoomed in view of the price ceiling and floor |
Source: @ki_young_ju on X “With current spot ETF inflow trends, the
top price could reach $104k-$112k,” says the CryptoQuant CEO.
“Without hype, maintaining the current level of 2.07, the price
would be $55-59k.” Related Reading: Bitcoin Flies Above $47,300,
But Watch Out For Extreme Greed In the best-case scenario, if
Bitcoin had reached the $112,000 target, the cryptocurrency would
have jumped more than 126% from the current spot price. BTC Price
At the time of writing, Bitcoin is trading at around $49,400, up
over 15% in the past week. Looks like the price of the coin has
shot up over the past day | Source: BTCUSD on TradingView Featured
image from Shutterstock.com, charts from TradingView.com,
CryptoQuant.com
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