Bitcoin
Bernstein raises Bitcoin price target forecast to $200,000, says buy the dip By Investing.com
Investing.com – Analysts at research and brokerage firm Bernstein raised their price forecast to $200,000, up from the previous target of $150,000.
Bitcoin and cryptocurrency-related stocks remain undervalued and are ripe for institutional inflection as pessimism from past regulatory hurdles fades, analysts wrote in a note Thursday.
“We remain convinced of our Bitcoin new cycle thesis,” the analysts wrote, adding that Bitcoin has been increasingly adopted by institutional investors and global asset managers. They believe this adoption is just the beginning, and the next wave of demand is expected to come from cryptocurrency viewers.
The note highlights that Bitcoin ETFs are far from complete. Since BlackRock (NYSE:) filed its Bitcoin ETF application on June 15, 2023, Bitcoin has increased by 150%. While early Bitcoin ETF allocations were driven by retail investors, with institutional participation at 22%, Bernstein sees strong growth in the future. “We see Bitcoin ETFs on the verge of approvals from major news outlets and major private banking platforms in Q3 and Q4,” the analysts noted.
The report also addresses the skepticism of pessimists who argue that ETF flows are not genuine, highlighting that institutional interest is initially driven by the “cash & carry trade” basis and not “net long” positions. However, Bernstein sees this basis trading as a “Trojan horse” to be adopted, with these investors gradually evaluating “net long” positions as they become comfortable with the ETF’s improving liquidity. They expect Bitcoin ETF flows to accelerate in the third and fourth, seeing the current market as offering new levels of entry before the next wave of institutional demand accelerates.
Bernstein’s analysis also reveals that Bitcoin portfolio allocations have ample room for growth. Thirteen-F records show that 22% of AUM is driven by institutional investors, with hedge funds representing about 36% of institutional allocation. Analysts believe that the next step for these investors is to evaluate ‘long’ positions. They also highlight that financial advisors, particularly small and medium-sized ones, with 0.1-0.3% of their portfolio allocated to Bitcoin ETFs, are starting to drive real demand.
“We believe growth will be driven by larger advisors approving ETFs and substantial allocation headroom in existing portfolios,” the note said.
Bernstein draws a parallel between Bitcoin’s current price levels and previous cycles, suggesting that Bitcoin in the $60,000 range today is equivalent to Bitcoin under $10,000 in June 2020. “Bitcoin, despite its recovery is still in an initial cycle and we see it as attractive here”, they noted.
Asset managers have every incentive to put more pressure on marketing and distribution to expand their crypto businesses,” the note concluded.