Analysts Predict Bitcoin Could Reach $45,000 by End of 2023

Market demand for options and expectations of interest rates from the Fed could help sustain Bitcoin's (BTC) price momentum, potentially reaching $45,000 by the year's end.

Analysts Predict Bitcoin Could Reach $45,000 by End of 2023

According to Markus Thielen, head of research at Matrixport and founder of DeFi Research, growing interest in price speculation markets, particularly among market makers, could significantly drive Bitcoin's growth.

"Bitcoin will reach $40,000 – possibly even $45,000 – by the end of the year," Thielen shared with CoinDesk.

The researcher noted:

"We have two massive options expiries on November 24th and December 29th with open interest totaling $3.7 billion and $5.4 billion. Calls outnumber puts by more than 85%, with 40,000 contracts open. As we approach $40,000, more people will need to buy Bitcoin to hedge their risks."

Another supportive factor for the bullish scenario is the decreasing inflation rate in the U.S. and expectations of rate cuts or liquidity easing from the Federal Reserve (Fed).

Inflation rates have shown a significant slowdown in recent months compared to the peak of 9.1% in June last year. According to UBS, the slowing inflation could mean the Fed might cut its benchmark rate by half to 2.75% from the current range of 5.25% - 5.5%.

"The U.S. CPI is currently at 3.2% while the interest rate is at 5.25% - a 2.0% gap. With the current inflation cycle, this gap could even be 3.0% - hence, we can expect a 200 basis point cut. This is an optimistic sign," Thielen said.

Finally, optimism surrounding spot ETFs from Wall Street financial firms recently could further bolster Bitcoin's upward trajectory. Bloomberg researchers suggest there's a 90% likelihood that the SEC will approve one or more spot ETFs before January 10.

Bitcoin prices set a new 2023 high at $37,980 on the morning of November 16, currently trading around $36,400.

BTC/USDT price chart as of 11:30 AM on November 17, 2023, on Binance