Bernstein: Bitcoin to Recover and Reiterate $150,000 Target Price After Halving
Despite the recent weakness in cryptocurrency prices, research firm Bernstein expects Bitcoin to resume its upward trajectory after the halving, reaffirming its target of $150,000. According to a report by Bernstein analysts Gautam Chhugani and Mahika Sapra, the bullish trajectory for Bitcoin is expected to resume after the halving, when mining power has adjusted and ETF inflows have recovered (after 10 days of negative to flat values). Additionally, the entry of spot Bitcoin ETFs and major brokerage firms will continue to provide structural demand for Bitcoin. Therefore, Bernstein maintains its previous view that Bitcoin will reach a peak of $150,000 by 2025.
Bernstein’s report also compares the price trends of Bitcoin after previous halvings and suggests that the significant price volatility of Bitcoin and other cryptocurrencies is related to halvings. Although not a direct causal relationship, these events often occur before significant bull markets in the Bitcoin market.
Bernstein points out that at today’s prices, miners produce/earn approximately $50 million worth of Bitcoin daily, accounting for only 0.12% of daily Bitcoin trading volume. Therefore, selling pressure is no longer the focus, and attention should be focused on new demand catalysts in each cycle. Demand catalysts typically coincide with a reduction in new supply after the halving, such as the liquidity post-pandemic and the purchases of Bitcoin by companies like Tesla, Square, and MicroStrategy. In this cycle, the demand is expected to be driven by spot Bitcoin ETFs and global leading asset management companies.
Based on historical observations, Bitcoin price breakthroughs always occur after halvings, sometimes months after. However, in the current 2024 cycle, the approval of ETFs in January led to a significant increase in prices before the halving. In the past 10 days, Bitcoin has corrected by about 15% due to a slowdown in ETF inflows and significant selling of GBTC. However, after the correction, the integration of spot Bitcoin ETFs with major brokerage firms will continue to provide structural demand for Bitcoin.
Cryptocurrency venture firm Wintermute also notes that miners have been steadily selling BTC recently as a measure to ensure profitability after the halving and to mitigate the impact on income while taking profits from the price increase. However, Bernstein expects that as less efficient mining operations become unprofitable, the industry will consolidate towards four leading mining companies: CleanSpark, Marathon, Riot Platform, and Cipher Mining. Additionally, with renewed interest from developers, Layer 2 scaling infrastructure teams, and NFTs, miners can earn more income from transaction fees. Therefore, Bernstein believes that leading mining companies may outperform Bitcoin in the next 12 months.
In conclusion, Bernstein maintains its target of $150,000 for Bitcoin and expects the cryptocurrency to resume its upward trajectory after the halving. The integration of spot Bitcoin ETFs and major brokerage firms, along with the consolidation of the mining industry towards leading companies, are expected to drive demand and profitability in the Bitcoin market.
