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Bitcoin’s Rally Sparks Optimism: $100,000 Milestone Within Reach

Bitcoin’s recent surge has rekindled hopes for reaching the elusive $100,000 price target by the end of the year, according to Standard Chartered’s Geoff Kendrick. After a disappointing start in January, the cryptocurrency has bounced back, climbing to its highest level in 2024 with an 11.7% increase over the week, pushing its price to around $47,565.

Kendrick, the Head of FX Research at Standard Chartered, has been a long-standing bull on Bitcoin. He predicts that the cryptocurrency could hit $200,000 by the end of 2025, buoyed by the recent approval of Bitcoin spot ETFs by the Securities and Exchange Commission on January 10. Kendrick believes these new investment vehicles could attract substantial inflows from more traditional financial sectors into the crypto market.

However, Bitcoin experienced a significant slump following the launch of the spot ETFs, with its price dipping to around $39,450 by the end of January. This downturn was partly attributed to heavy outflows from the Grayscale ETF, which converted from a pre-existing Bitcoin trust fund. Facing competition from 10 other ETFs and already holding billions in Bitcoin, the fund saw $2.5 billion exit in its worst week, as noted by JPMorgan.

Yet, the tide appears to be turning. Kendrick suggests that the slowdown in GBTC’s outflows, coupled with robust inflows into other ETFs, may be driving Bitcoin’s recent price recovery. “I think it is simply down to the changing flow dynamics in the new US ETFs,” he explained. With GBTC selling slowing to an average of $59 million a day this week and other ETFs seeing strong inflows of an average of $244 million a day, the market dynamics seem to be shifting favorably.

For Kendrick’s year-end price forecast to materialize, between 437,000 and 1.32 million new Bitcoins would need to be held by spot ETFs, potentially pushing the price to $200,000. As outflows halt and net inflows potentially reach $50 billion to $100 billion, achieving the $100,000 threshold by year’s end remains a possibility.

Bitcoin’s recent performance and the evolving dynamics of the ETF market paint an optimistic picture for the cryptocurrency’s journey towards unprecedented heights. Investors and crypto enthusiasts alike are closely watching as Bitcoin challenges the $100,000 mark, a milestone that seemed distant just a few weeks ago.