The founder of on-chain analytics firm CryptoQuant says that Bitcoin will reach the target of $112,000 this year driven by ETF inflows.
Bitcoin Could Hit $112,000 Based On Flow Into ETFs
In a new one post at X, CryptoQuant CEO and founder Ki Young Ju talks about the cryptocurrency outlook based on inflows towards spot exchange-traded funds (ETFs).
The analyst uses the “Realized Cap” indicator to find price targets for the coin. Realized Cap refers to a capitalization model for Bitcoin that calculates the total asset valuation by assuming that the true value of any coin in circulation is the price at which it was last transacted on the blockchain.
If the previous transaction of any token is believed to have involved a change of hands for it (that is, buying and selling took place), then the final transfer price is equal to the coin’s cost base.
As the Realized Cap essentially increases the cost base of all investors, one way of looking at the metric is as a measure of the total amount of investment placed by coin holders.
Naturally, the Realized Cap pushes up as trades occur at higher spot prices. One factor that may be more influential for Realized Cap in this cycle may be the area of ETF flows.
Spot ETFs, which finally got approval from the US Securities and Exchange Commission (SEC) last month, are buying Bitcoin at relatively high prices to add to their holdings, thus increasing the Realized Cap.
The chart below shows the data for the holdings of spot ETFs and the Bitcoin Realized Cap.
The trend in the spot ETF holdings and BTC Realized Cap | Source: @ki_young_ju on X
“The Bitcoin market has seen $9.5B in spot ETF inflows per month, potentially raising the realized cap to $114B per year,” Ju explained. “Even with $GBTC outflows, a $76B increase could raise the realized cap from $451B to $527-565B.”
The Market Value to Realized Value (MVRV) ratio can provide some clues as to how the Realized Cap may relate to the price of the property. This indicator tracks the BTC Market Cap and the Realized Cap ratio.
“Historically, the BTC market bottom occurs with an MVRV of 0.75 and above 3.9,” says the CryptoQuant founder. Based on this fact, the table below shows that the 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, the Realized Cap will only push further, and the potential cryptocurrency ceiling will also increase.
Zoomed in view of the price ceiling and floor | Source: @ki_young_ju on X
“With the current spot ETF inflow trend, the highest price could reach $104k-$112k,” says CryptoQuant CEO. “Without the hype, maintaining the current level of 2.07, the price will be $55-59k.”
In the best scenario, if Bitcoin reaches the $112,000 target, the cryptocurrency will jump more than 126% from the current spot price.
At the time of writing, Bitcoin is trading at around $49,400, which is up 15% over 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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