Dec 7, 2023

Markus Thielen, head of research and strategy at crypto financial services platform Matrixport, joins "First Mover" to discuss bitcoin's (BTC) recent price movements as the largest cryptocurrency by market cap has gained roughly 14% in the past week.

Video transcript

The state of crypto is presented by Tron connecting the world to the power of Cryptocurrency. Matrix Sport anticipates Bitcoin climbing up to $63,000 by April 2024. Why should you care? Well, a month ago, they predicted Bitcoin would hit $45,000. Guess where it is? Yeah, it hit that just a couple of days ago. Joining us now to discuss the next move in crypto is Matrix Support, head of research and strategy, Marcus Sten. Welcome back, Marcus. Thanks for having me. Glad to see you again. So as as I said, a month ago, you said $45,000 was imminent. You weren't kidding? And I was skeptical. So I think we all were Marcus. Yeah, I was like, ok, yeah, that's, that's all right. Have fun with that Marcus. And sure enough here we are 4040 change, we hit 45,000. Um What do you think is driving this bull run? Um And don't just say I told you so because you told us so, but also what's the underlying factors in this latest bull run? Well, when you look at February 1st, there's actually a a coin desk article where we already predicted by December this year 45,000. So we have been working with this 45,000 level for literally the whole year. But you know, this year we have seen actually four legs or five legs with the latest one of this bull market, right? The first one started in January based on lower inflation numbers. Uh The second one was in March. On the one side, we got, of course, the three banks that were dismantled. Bitcoin is a new financial system basically. Uh We also had, of course, b using moving a lot of B US D into Bitcoin during this time. Then of course, in June, we had the Blackrock announcement about the potential ETF F. And then I think what people, what a lot of people missed actually in October, we had then a 50 60% rally on the back of power actually started to turn do. And I think this was actually a big trigger. Um It was only really like the last 23 weeks where people became more confident about the Bitcoin ETF potentially being approved in January. Um But I think it was actually in, in October when Fetcher Powell turned Dovish that we started to have a, a monster rally and we were just really pushing the market. And, you know, we were on top of this. And last time we spoke, you know, we also talked about the miners, the miners are exploding. So we are really happy right now. So, so you, you mentioned the B US D to Bitcoin rally and we of course, saw this uh settlement now with uh finance and the US government which uh would cause CZ to uh spend uh uh uh a few days uh getting three hots and a cot from, from the federal government. So, um did that have any, did that play any factor? Do we know of anything uh in terms of movements involving B into in and the price of Bitcoin? Uh ha has there been any linkage if you will in this latest rally? Some, some people try to argue this way. I mean, I doubt it. I don't think there's anybody out there who has been like sitting on the sidelines and waiting until basically the, you know, the US government goes after Binance. I don't think this was the trigger. I mean, the only positive news there was that people expected something like 6 to 10 billion uh fines or 4 billion. Sounds a lot more positive. But I think the key thing that, that I didn't hear anybody talking about is that since, since October, we have seen $7 billion of uh new market cap in US CT and tethers. So this just shows there is a large investor or large investors, institutional investors are sending money to tether, minting tether and really moving money probably from US dollar into crypto and I think that's a big driver. This is like $7 billion of fresh money that's coming in. That's, you know, much bigger than ETP, that, you know, people try to quote or name. Um, so, yeah, so I don't think that's, that's the driver. I think the driver is something else. Well, where, where is that source of tether? Where is it coming from? Obviously, Tether is notorious about its opaqueness. But do we have any sense of what drove that amount of money going into tether? Which I mean, let's be honest, is barely redeemable if at all, unless you are, I don't know, Saman man freed uh who apparently had some ability to do some redeeming. But other than that, why did we have those purchases of tether? It doesn't say that's not a US gov that's not a US institutional play. Well, on the one side, you know, we have a lot of struggles still in China. And as you might know that uh you know, the most tethers being issued are actually on throne, not on this year. So and Tron is of course, you know, to some extent linked to emerging markets linked to China. You know, we we have heard of course the property uh vo still continue in China, you know, gold prices are also going up, which is also probably linked to China. The PB OC has been really starting to buy gold over the last three or four months. So we would assume that's probably, you know, the population also starts to buy gold and probably other assets as well. So I would really think, uh you know, you look at the market cap of tether, which started to really, really since uh since Powell's speech. So I think there is somebody believing in the market that this Darvish flip really that you have seen from the central bank is really driving a lot of asset inflows. And you know, Bitcoin is a key beneficiary here, but it could, it, I mean, it's not internal issues going on in China for instance, or, or what have you uh people trying to get money out and uh you know, we we we do know of some, let's just say questionable movements in the past involving China and uh and funds and tether. Yeah, of course, we don't know. Right. We don't know, but we know that the market cap is going up. We also know a lot of other historical analysis. For example, when the, when the CME listed the Bitcoin futures in 2017, from the moment they announced it until the futures were actually listed. Bitcoin went up 180%. So, you know, we can assume that the market uh you know, uh the animal spirits are really taking over now where people are kind of just really trying to front from this part as well. But I think it's really like the mixture of really, you know, positive news from the central bank. You know, a lot of money suddenly becoming, you know, free and going into crypto. Uh and I think this is something really happening under the hood without people really noticing it. Marcus. We uh we got to get your comments on this clip. Everyone's talking about Jamie Dimond JP Morgan Chase CEO and chairman. He was on Capitol Hill yesterday talking about Bitcoin. Let's take a listen. I've always been deeply opposed to crypto, Bitcoin et cetera. You pointed out the only true use case for it is criminals, drug traffickers, antimo laundering, tax avoidance. And that is a use case uh because it is somewhat anonymous, not fully and because you can move money instantaneously and because it doesn't go through, as you mentioned, all these systems have built up over many years. No, your customers sanctions. Of fact, it's didn't get bypass all of that. I, if I was the government's, I'd close it down. All right, Marcus, we have those comments from Jamie Dimond that's up against uh massive asset managers like black rock racing towards the spot. Bitcoin ETF. What do you make of that? Well, I think it's a, it's a comment from the past, right? I mean, this comment we have heard, you know, 5678 years ago already, you know, from, from Jamie Diamond, you know, we know that JP Morgan internally has been active on crypto the last kind of like, you know, 67 years, really, they have their own crypto internal team. So, you know, I think that the banks are trying to just fight a little bit back here, but I think it's still that this universe is getting like bigger and bigger. And I think we just have to see how crypto develops. Now. Just before we wrap, we got to talk about matrix ports predictions for next year. Since your 2023 predictions have kind of come in spot on. We have a chart here from your latest report that shows Bitcoin hitting 100 and $25,000. Talk to us about what factors went into uh this prediction. Why are we expecting it to hit 125 next year? Yeah. So the 30 the 63,000 target is actually from last year end of October, which is like the myth having low and then the projection, you know how it's like played out. And this really put us on a really bullish map this year. Um You know, the other factor is that um in, in June this year, we had the one year new high making for the first time in a year. And historically, we have seen like a 300% increase from there, you know, from that moment on. But also when you look at the, the three halving years, 2012, 2016, 2020 the average return is 200%. So where we are right now, you know, around like 40,000 or 45,000. I think you could really project another, you know, uh 200% from here, which would get us to 100 and 20,000. I know it sounds quite optimistic, but I think, uh we'd be probably gonna make our move towards 100,000 next year, for sure. All right, Marcus, I think there's a lot of people watching that are really hoping that prediction comes true. Thanks so much for joining us. It's always a pleasure having you on the show and happy holidays. Thank you. You too. That was Matrix four, head of research and strategy. Marcus Thin.

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