Matrixport analyst Markus Thielen believes that the price of Bitcoin in the current market cycle could reach $125,000, with the cycle continuing until February or September next year. However, there is no sign of any breakout narrative for altcoins at the moment.
With Bitcoin’s market cap reaching $1 trillion and its price rising 50% within a month, Markus Thielen’s market analysis report has gained widespread attention in the community. Markus Thielen is known as an analyst for Matrixport and a researcher at 10X Research.
Markus Thielen’s Bitcoin reports have been quite accurate in predicting the price movements in recent months. Whether it is an increase or decrease, it seems to be within his calculations. Just recently, Markus Thielen’s analysis indicated a potential downside risk for Bitcoin, and the market responded with a decline. However, it was later confirmed that the SEC did approve a spot ETF for Bitcoin. Matrixport has also been criticized for allegedly manipulating the Bitcoin market.
When Bitcoin surpassed $65,000 and was approaching its previous high of $69,000, BlockBeats interviewed Markus Thielen. The most important information for everyone is that this exceptionally accurate analyst believes that Bitcoin could reach $125,000 this year. Apart from the price, Markus also discussed the impact of ETFs and his views on the market.
BlockBeats: Alright, first of all, could you briefly share your background and how you became a Bitcoin analyst at Matrixport?
Markus: A few years ago, I worked as the head of the quantitative and derivatives strategy department at Morgan Stanley, essentially becoming a portfolio manager, working for large banks and hedge funds. I also set up my own hedge fund in Hong Kong and served as the chief investment officer of a cryptocurrency asset management company. These experiences led me to Matrixport.
BlockBeats: So you have been trading Bitcoin for many years?
Markus: Yes, I first became interested in Bitcoin in 2013. We tried setting up some trading platforms for arbitrage as a side business in 2015, but I started full-time trading a few years ago. When the market capitalization became quite high, Bitcoin truly became a macro asset, and that’s why we were able to make accurate predictions, based on quantitative analysis, macro views, and liquidity analysis. These components form the foundation of the market and our predictions.
BlockBeats: I see. Let’s talk about Bitcoin directly. You mentioned in November last year that Bitcoin could potentially rise to $57,000. Has the current situation exceeded your expectations?
Markus: First of all, in October 2022, we said Bitcoin could reach $63,000 this year in March, entering the halving period. Our views and analysis are supported by data, and we don’t just randomly come up with price targets. When we said Bitcoin could reach $57,000 in November last year, it has indeed exceeded our expectations.
Around October 2022, about 15 months ago, we were already looking at the $60,000 position. But the reality is, when you see the previous cycle symmetry, you will find that the bull market has only gone halfway. When you understand how the previous bull market evolved, you won’t be surprised by Bitcoin’s 10% overnight surge. For example, the analysis we did this morning (February 29th), it’s also hard for us to be bearish here because it will continue to rise.
BlockBeats: Do you think this bull market has only gone halfway?
Markus: Based on the data we’ve executed, it looks like we’re only halfway through this bull market. This doesn’t mean that we will rise by 150% or 160%. But when you look at the previous cycles, I can show you a chart (see the chart below), and if you buy before the halving 500 days ago, it’s actually a bottom.
Then in the next 500 days, which is 18 months, it’s the second stage of the rebound.
[Chart Image]
BlockBeats: I can’t imagine how high Bitcoin can rise anymore.
Markus: There are two pieces of data. We don’t randomly come up with numbers. I don’t rely on emotional trading. But in the past three presidential elections, which coincided with the halving cycle, so in 2012, 2016, and 2020, Bitcoin had an average return of 192% in those years, and it has risen over 100% every year.
So based on 192%, we start this year at $40,000, and Bitcoin can reach $125,000 by the end of the year. The indicator we saw in July last year was that when Bitcoin sets a new high within a year, there will be a 300% rebound. So this data also leads us to $125,000. Last year, our judgment was quite accurate, and this year we might be more conservative, with Bitcoin potentially reaching $125,000 by the end of this year or next year.
BlockBeats: $125,000, that’s incredible. So what is the main reason that Bitcoin can reach such a level? Is it the ETF? I feel like we are underestimating the impact of the ETF.
Markus: Asia may not understand or really realize that many asset management companies in the United States are using ETFs for their asset allocation decisions. People in Asia like to buy specific stocks, such as individual stocks like Bank of China. In contrast, in the United States, when investors like banks, they buy the whole basket. That’s the true meaning of ETF.
These asset management companies manage a large amount of funds, not just a thousand dollars, but billions. They don’t say they put a million into JPMorgan, they say it’s a billion-dollar bank index. These people have access to ETFs with astronomical amounts of money. We have been trying to indicate since July last year that if these ETFs are approved, the entry of these billions of dollars will have a huge impact.
The market has been comparing the changes in Tether’s market cap with the price of Bitcoin. For example, the issuance of $10 billion USDT theoretically should mean $10 billion of fiat currency entering the cryptocurrency. But now this money can flow into these Bitcoin ETFs instead of going through USDT, so we are seeing a surge.
BlockBeats: So the ETF is the main reason for the current surge?
Markus: It’s the ETF, but the ETF represents the institutionalization of Bitcoin. I have traded gold, interest rates, forex. When there is uncertainty, you buy gold because it’s a hedging tool. But Bitcoin is a better hedging tool.
First of all, it reacts much more strongly to changes in US interest rates. It reacts much more strongly to wars, like when Bitcoin surged more than gold during the Russia-Ukraine conflict. You know, when there is a banking crisis in the United States, just like what we saw last March, Bitcoin rose from $20,000 to $28,000 within two weeks. Bitcoin is becoming a better macro asset than gold.
There are currently two largest gold ETFs with assets under management of $80 billion, and one of them, with $55 billion, had $2.7 billion outflows. I suspect that this outflow of funds has been shifted to Bitcoin. I believe it’s a shift in allocation from gold to digital gold. So we may not see registered investment advisers or institutions personally buying Bitcoin now; we may only see people who own gold shifting their allocation to digital gold.
BlockBeats: Do you think there will be any black swan events?
Markus: It’s highly unlikely. We are in a bull market, and it seems unlikely from regulation or from the Bitcoin network itself. The only possible black swan event would be someone gaining access to Satoshi Nakamoto’s wallet.
BlockBeats: Many people are curious about how you analyze the market. Do you use any tools or models?
Markus: Yes, we have many tools that we run every day, regardless of weekends or holidays. In the past few years, every day, as soon as I wake up, I store data just for us to understand what’s happening and see if there are changes in supply and demand. At the same time, we run many quantitative models. For example, when Bitcoin was at $48,000 two weeks ago, it was overbought, and the market’s conclusion was to take profits.
But in reality, our backtesting gave the exact opposite conclusion. In October 2022, when everyone was talking about regulation, bear market, bankruptcy in the United States, Bitcoin was priced at $20,000, but we proposed $63,000. It seemed strange at the time, but it was what the data told us.
BlockBeats: Have there been times when the data told you that it would rise, but you personally believed it should fall?
Markus: Based on my experience, the data is often correct. And the most painful moments are when you see that your model is correct, but you didn’t participate as the model suggests.
For example, last night I thought I should take some profits, but I suddenly saw that trading activity in Korea had increased significantly in the past 24 hours. A few months ago, Upbit had less than $1 billion in trading volume. But in the past 24 hours, the volume has exceeded $7 billion. So the Asian trading time is no longer in a sideways pattern.
BlockBeats: More and more people are reading your reports, and it seems like your reports are having a greater impact on the market. Do you feel more pressure?
Markus: Yes. It’s important for us to provide good analysis for our readers and subscribers, to provide high-quality reports. The more attention you receive and the more people who follow you, the more pressure there is. Especially when we have been accurate so many times, we are naturally afraid of being inaccurate. But I still believe in my data models.
BlockBeats: Besides the ETF and the inflow of gold funds, are there any other reasons that could drive up the price of Bitcoin?
Markus: Honestly, I can’t see any other reasons at the moment. This bull market is very different. The previous bull market was the DeFi summer, with altcoins taking the spotlight. But this time, it’s more focused on Bitcoin, more or less.
BlockBeats: So it could be a Bitcoin bull market, not an altcoin bull market.
Markus: Yes.
BlockBeats: But many people would think that the funds profiting from Bitcoin can flow into other altcoins.
Markus: People who buy ETFs don’t see it that way. Bitcoin’s dominance is around 52%, and if there is indeed a rebound in altcoins, Bitcoin’s dominance would have to drop below 50%, and I don’t see the narrative of altcoins yet. There was a narrative during the DeFi summer. But I haven’t seen it yet.
BlockBeats: How long do you think this bull market will last?
Markus: I think it will continue until February or September next year.