Despite recent weak price performance, research firm Bernstein still expects Bitcoin to resume its upward trajectory after the halving, reaffirming its long-term target of $150,000. Quoting a report from Bernstein, analysts Gautam Chhugani and Mahika Sapra stated in a report to clients on Wednesday that they anticipate Bitcoin’s bullish trajectory to resume after the halving, given the adjusted mining hash rate and the expected recovery of ETF inflows (which have been negative to flat over the past 10 days). 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 cycle high of $150,000 by 2025. Bernstein also compared the price trends of Bitcoin after previous halvings and believes that the halving is associated with significant price volatility in cryptocurrencies. While not a direct causal relationship, these events typically occur before major bull markets in the Bitcoin market. According to Bernstein, miners currently produce/earn approximately $50 million worth of Bitcoin per day at today’s prices, 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 usually 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 terms of historical observations, Bitcoin price breakthroughs have always occurred after the halving, sometimes several months after. However, in the current 2024 cycle, the approval of ETFs in January led to a significant price increase before the halving. In the past 10 days, as ETF inflows slowed down and there was a significant sell-off of GBTC, Bitcoin corrected by about 15%. However, after the correction, the integration of spot Bitcoin ETFs with major brokerage firms will continue to provide structural demand for Bitcoin. Crypto venture firm Wintermute also pointed out 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 also taking profits due to price increases. However, Bernstein expects the industry to consolidate towards four leading mining companies as less efficient mining operations become unprofitable. Bernstein is optimistic about CleanSpark, Marathon, Riot Platform, and Cipher Mining. Additionally, with renewed interest from application 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.
Bernstein: Bitcoin to Rebound After Halving, Reiterates $150,000 Target Price