Citigroup analysts have released a new Bitcoin price prediction model, and it’s surprisingly straightforward. They’ve ditched complex calculations involving mining costs and adoption rates, focusing instead on a single key factor: investor demand.
A Shift in Perspective
The analysts explain that their previous models didn’t fully account for Bitcoin’s growing integration into the broader financial landscape. Cryptocurrencies are no longer a niche market; they’re becoming a significant part of major financial indices, meaning even investors who aren’t interested in crypto need to consider their impact.
The New Model: Following the Money
The analysts’ new model centers on the weekly inflows into Bitcoin exchange-traded funds (ETFs). They’ve found a strong correlation between these inflows and Bitcoin’s price performance. In fact, they estimate that 41% of Bitcoin’s price changes since the start of the year can be explained by ETF investment alone.
Bitcoin Price Predictions
Based on their analysis and projected ETF inflows, Citi offers these Bitcoin price targets by the end of the year:
- Bull Case:
$199,340 - Base Case: $135,133
- Bear Case: $63,675
The analysts predict continued strong ETF inflows, estimating around $15 billion for the rest of the year. However, they acknowledge that this is an estimate, and the actual amount could be higher, significantly impacting their price forecast. Each additional $1 billion in weekly inflows is projected to boost Bitcoin’s return by 3.6%.
Disclaimer: This information is for general knowledge and does not constitute investment advice. Always conduct your own research before making any investment decisions./p>