by In a bold prediction, Asia-focused Tiger Research has set an ambitious price target of $190,000 for Bitcoin (BTC) by the third quarter of this year. This forecast is based on a combination of factors that point to a robust market environment reminiscent of the highs seen in 2021. With record global liquidity, an increasing demand for Exchange-Traded Funds (ETFs), and new access for 401(k) retirement accounts, the conditions are ripe for significant growth in Bitcoin’s price.
Understanding the $190,000 Price Target
Tiger Research’s model begins with a “base price” of $135,000 for Bitcoin. This base is adjusted with multipliers that account for fundamental factors, increasing it by 3.5%, and macroeconomic conditions, which add a substantial 35%. This leads to the forecasted price of $190,000, representing a 67% increase from the current average price of approximately $113,000.
Key Drivers Behind the Price Surge
The report identifies three pivotal drivers fueling this optimistic outlook:
- M2 Money Supply: The M2 money supply has surpassed $90 trillion, indicating an abundance of liquidity in the market.
- ETF and Corporate Accumulation: Institutional investment now accounts for 6% of Bitcoin’s total supply, showcasing a growing interest from corporate entities.
- Regulatory Developments: Recent regulatory changes in the U.S. have opened retirement accounts to cryptocurrency investments, signaling broader acceptance and integration of digital assets into traditional finance.
The Impact of 401(k) Access on Institutional Investment
Tiger Research emphasizes the significance of an executive order that allows 401(k) plans to include Bitcoin as an investment option. This move is seen as a definitive signal of Bitcoin’s transition into a core institutional holding. If just 1% of the $8.9 trillion retirement savings pool allocated to Bitcoin, it could translate into nearly $90 billion in demand.
Current Market Accumulation Trends
Market data reveals a noteworthy trend in Bitcoin accumulation. ETFs currently hold approximately 1.3 million BTC, while major corporate players like MicroStrategy (MSTR) own over 629,000 BTC, valued at roughly $71 billion. This accumulation through convertible bonds adds a structural quality to the inflow of capital into Bitcoin.
Shifts from Retail to Institutional Activity
Recent trends indicate a shift from retail participation to institutional activity in the Bitcoin market. Transfer volumes have skewed towards larger transactions, with a noticeable decline in the number of daily transactions. This reflects a pivot towards institutional block activity, suggesting that larger players are taking on more significant positions in Bitcoin.
Challenges: An Unbalanced Network?
Despite the bullish sentiment, Tiger Research acknowledges that the current network dynamics appear unbalanced. Daily transactions and active user counts are significantly lower than last year’s highs, indicating a fading retail participation. To stimulate activity beyond institutional wallets, new initiatives such as BTCFi may be necessary.
On-Chain Metrics and Market Caution
On-chain metrics reveal a market that is active but not overly exuberant. The MVRV-Z metric, which gauges the market price relative to the original purchase price, currently sits at 2.49. Historically, this zone has indicated potential corrections as profits build up. Additionally, the Adjusted Spent Output Profit Ratio (ASOPR) is at 1.019, signaling that coins being sold are only slightly in profit, as traders appear to be locking in modest gains instead of cashing out at extreme highs.
Net Unrealized Profit/Loss (NUPL) Analysis
The Net Unrealized Profit/Loss (NUPL) metric stands at 0.558, suggesting a healthy market position, but not one characterized by euphoria. This indicates that while the market is hot, it has not yet reached a point of overexposure.
Conclusion: A Promising but Cautious Outlook
In conclusion, Tiger Research’s analysis presents a compelling case for Bitcoin’s potential to reach $190,000, driven by significant institutional interest and favorable macroeconomic conditions. However, the current market dynamics indicate the need for caution, with established on-chain metrics providing a balanced view of the market’s health. As the cryptocurrency landscape continues to evolve, stakeholders must remain vigilant and informed to navigate the opportunities and risks that lie ahead.
For more insights on Bitcoin and cryptocurrency, check out our articles on Bitcoin ETFs and how to buy cryptocurrency.
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