Matrixport, a crypto asset management firm based in Singapore recently predicted that Bitcoin will have a hard time during the first quarter of 2024 despite an otherwise positive report for the rest of next year.
Their report highlights two key challenges: the weak institutional demand for spot ETFs and profit-taking by Grayscale Bitcoin Trust (GBTC) investors.
This latter is further aggravated by the fact that Bitcoin has recently dipped below $40,000 for example. Nevertheless, Matrixport still believes that Bitcoin will bounce back due to its underlying strength and the increasing recognition of it as a trustworthy asset among institutional investors.
Coinbase Research joins the enthusiasm, admitting that spot ETFs could lead to new traditional derivatives markets despite persisting regulatory barriers.
They emphasize that potential demand unleashed by these products is revealed in billion inflows of dollars into BlackRock and Fidelity’s spot Bitcoin ETFS.
The short-term headwinds, however, notwithstanding and despite the fact that both Matrixport and Coinbase Research believe Bitcoin’s long-term outlook is strong.
Meanwhile, the increasing institutional support and further opportunities for new financial instruments clearly show that Bitcoin is on a long journey to be treated as conventional.
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