Bitcoin (Bitcoin) It soared 9.5% on Wednesday, marking its biggest single-day gain since Oct. 23, according to charting platform Tradingview.
The price rose to $64,000 on several exchanges, the highest since November 2021. The parabolic move from Monday’s lows near $51,500 is widely attributed to Wall Street’s acceptance of spot-based Bitcoin ETFs. The broader market index, the CoinDesk 20 Index, rose more than 10% this week.
The consensus is that the rally will continue in the coming months, pushing prices into six digits.
Analysts at crypto exchange Bitfinex said: “Our analysis suggests that a conservative price target of $100,000 to $120,000 will be achieved by the fourth quarter of 2024, and that the cycle peak in crypto market capitalization is We expect this to be achieved by the end of 2025.”
“ETFs have introduced ‘passive demand,’ meaning that demand primarily comes from price-independent investors. They view Bitcoin as a volatile asset rather than a tradeable asset. , and have been for several years prior to the introduction of ETFs,” the analyst added.
Earlier this week, technical analysis expert Peter Brandt said Bitcoin could reach a peak of $200,000 by September 2025.
These predictions are sure to cheer up directional traders. However, with cash-and-carry arbitrage yields currently three times the yield on the 10-year Treasury, the so-called risk-free rate, there is no need for directionless traders to feel left out. There isn’t.
Cash-and-carry arbitrage is a market-neutral strategy that seeks to profit from price differences between spot and futures markets. Arbitrageurs combine long positions in the spot market with short positions in futures when futures trade at a premium to the spot price. As the futures approach expiration, the premium evaporates, and on the day of settlement, the futures converge to the spot price, yielding a relatively risk-free profit for the arbitrageur.
According to blockchain analysis firm Glassnode, a Bitcoin cash-and-carry strategy that includes three-month futures has a yield of over 14%. This is more than three times the 10-year Treasury yield of 4.27% and 2.8 times the one-year Treasury yield of 5%.
Relatively high yields may attract more funds to the crypto market.
“The yield available in the futures market will likely begin to draw market makers back into the digital asset space, deepening liquidity in the market,” Glassnord said in his weekly newsletter.
