Could we witness Bitcoin’s rise above $40,000 in the near future? Analyst Markus Thielen from Matrixport seems to think so, following significant developments in the cryptocurrency world. These include Binance’s settlement with the DOJ and the guilty plea from its former CEO, Changpeng Zhao, to financial violations. These events, he suggests, have marked a pivotal shift in the crypto landscape.
A Turning Point for Binance
The agreement Binance reached to pay a whopping $4.3 billion in fines is one of the largest corporate settlements in U.S. history. Following his resignation as CEO, Zhao is set to pay a fine of $50 million and a personal recognizance bond of $175 million. There’s also a potential 18-month prison sentence looming, with a hearing scheduled for February 23. Despite the severity of these penalties, they are less than the feared $10 billion fine. Importantly, Binance has not been accused of misusing user funds or market manipulation. Thielen believes this suggests Binance will likely remain a top-three exchange over the next 2 to 3 years.
Bitcoin’s Resilience Amidst Binance News
While the Binance news was initially seen as a risk-off event, Bitcoin only underwent a temporary correction, bouncing back from the $36,000 level in a robust counter-trend reaction. Thielen predicts that Bitcoin’s rise above $40,000 is inevitable. He anticipates Bitcoin surpassing $38,000 by the end of this month with an 80% probability, and a rally above $40,000 in December with a 90% probability.
Bitcoin’s price surged by 28% in October 2023, a trend that may continue with the expected approval of a Bitcoin spot ETF in the U.S. This would further solidify confidence in Bitcoin as a legitimate asset class. Seasonality is another factor, with average December returns of 12% potentially propelling Bitcoin to $42,000 by this metric alone.
Supportive Macro Environment
The macro environment continues to be supportive of crypto. Matrixport predicts another halving of inflation towards 1.6% and a decline in bond yields to 2.60% by 2024 or 2025. This follows the peak of the U.S. 10-year Treasury yield at 4.95% in this cycle. The adjustment in bond yields is expected to trigger a surge for the stock market, which often correlates with cryptocurrencies.
Since September, Tether’s USDT market capitalization has increased by $5 billion. This suggests a growing trend among institutional investors shifting from fiat into stablecoins, potentially converting them into other cryptocurrencies, such as Bitcoin.
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