Bitfinex, in its 52-page "Bitfinex Alpha" report, has shared an optimistic outlook for Bitcoin and the broader crypto market as we approach 2024. Despite facing regulatory and reputational challenges in 2023, Bitcoin has demonstrated a remarkable resilience, leading Bitfinex to maintain a positive stance on its future.
Market Fluctuations and Growth Potential: Bitfinex recognizes the likelihood of market pullbacks, a common occurrence based on historical market behavior. With the total cryptocurrency market capitalization at around $1.6 trillion, Bitfinex projects the possibility of it reaching $3.2 trillion, with values โโfluctuating within this range.
Institutional Sentiment and Investment Indicators: The report points to several metrics and sentiment indicators, predicting a likely shift towards โextreme greedโ sentiment in 2024, which correlates with new highs for Bitcoin. Bitfinex anticipates increased institutional investment in crypto assets, particularly driven by the long-awaited Bitcoin spot ETF, which is expected to be a major catalyst. However, the report suggests that institutional investment will likely continue to favor Bitcoin, at least through the first half of 2024.
Bitcoin valuation and mining activity: The report examines the market value of Bitcoin relative to its realized value, using the MVRV metric. Current valuations compare to periods such as June 2019 and July 2016, which saw initial price declines followed by recoveries. Bitfinex expects a similar pattern, with possible pullbacks before a sustained upward trajectory.
Halving year and miner profitability: With 2024 being a halving year for Bitcoin, Bitfinex highlights the importance of monitoring mining activity. The halving will reduce Bitcoin profits for miners, requiring efficient and profitable operations. The Puell Multiple analysis indicates a healthy market state, suggesting room for Bitcoin price growth with limited selling pressure from miners.
Global adoption and macroeconomic outlook: He report It also addresses the adoption of Bitcoin in markets such as El Salvador and Argentina. He mentions that gradual adoption continues in El Salvador, with a focus on the development of infrastructure for Bitcoin transactions. He sees Argentina's economic volatility and high inflation rates as drivers of increased adoption of cryptocurrencies as a hedge against currency devaluation.
Global Cryptocurrency Ownership and Economic Trends: Bitfinex predicts a significant increase in global cryptocurrency ownership, potentially reaching between 850 and 950 million users by 2024. According to the Bitfinex report, the macroeconomic outlook remains positive, with expectations of slowing wage growth and a moderate increase in unemployment rate. The report adds that inflation rates are expected to decline, supported by factors such as improving supply chains and a subdued global economy.
Inflation and recession risks: The report states that while core inflation in the United States is expected to fall, geopolitical tensions and cuts in oil production could increase headline inflation. It says avoiding a recession in 2024 is still uncertain and a return to the ideal two percent inflation rate is not guaranteed. Bitfinex anticipates an overall inflation rate of around 2.9 percent by the end of 2024.
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