Two Key Points for Tracking Bitcoin Prices — An Interview with Yasuo Matsuda, Rakuten Wallet

--What are your thoughts on future trends in the crypto asset market in light of the current global and financial situation?

Kosei Matsuda (‘Matsuda’): Supply and demand balance is a factor in price fluctuations in the market, not just for Bitcoin.

In the case of Bitcoin, the number of issued coins has already been set at 21 million, and next year the number will reach its half-life and the speed of issuance will be halved.

I personally expect the price to rise to around USD 40,000-50,000 from now on, based on the supply side, from March to April next year. In terms of the current price (as of 1 November), I imagine it will rise by 20-50%.

In terms of demand, the bitcoin market currently depends on the monetary policy of the Federal Reserve (FRB).

The reason why the Fed's monetary policy is important is related to the largest fiscal stimulus and monetary easing in history with the new Corona.

Bitcoin reached its highest price in 2021, mainly due to the inflow of institutional money, mainly hedge funds, in the US, but as of around April 2020, there were growing observations that inflation would come as a result of this largest-ever monetary easing (printing more US dollars).

Against this backdrop, some investors invested their money in bitcoin in the process of considering hedging instruments. However, in November 2021, bitcoin reached a high and then fell.

This was just as tapering, i.e. the correction of excessive monetary easing, began.

There have been numerous rate hikes since then, but in November, interest rates were decided to remain unchanged for the second meeting in a row, and the prospect of a halt to interest rate hikes has intensified.

This is one of the factors pushing up the bitcoin price. Over the past 30 years, interest rates have been cut on average about nine months after the last rate hike.

In this light, assuming that July 2023 is the last rate hike, the interest rate could be lowered in April 2024. We believe that the bitcoin market price will also rise another notch at the time of the next rate cut.

Bitcoin to rise to $40,000-$50,000 in the coming years, with a possible global recession in 2024.

BTC market price in terms of the Fed's monetary policy trends

Source: prepared by Rakuten Wallet from Bloomberg.

Two important points to keep in mind when following the market