Bernstein analysts predict Bitcoin will reach 200k
Analysts at Bernstein have revised their Bitcoin (BTC) price forecast, increasing it to $200,000 from the previous target of $150,000. The Wall Street experts believe that Bitcoin and other crypto-related stocks are undervalued and ready for institutional investment, as previous regulatory concerns fade away. They specifically highlight their confidence in the “Bitcoin new cycle thesis,” citing the growing adoption by institutional investors and global asset managers. They believe that this trend is just the beginning and anticipate a surge of demand from those who have been on the sidelines of the crypto market.
According to the analysts, Bitcoin ETFs are still in their early stages. Since BlackRock filed its Bitcoin ETF application on June 15, 2023, the price of Bitcoin has increased by 150%. Initially, retail investors were the main drivers of Bitcoin ETF allocations, with institutional investors accounting for only 22%. However, Bernstein predicts significant growth ahead, expecting Bitcoin ETFs to gain approval at major wirehouses and large private bank platforms by the third or fourth quarter of this year. They view the initial institutional interest as a “trojan horse” for broader adoption, with increased ETF liquidity leading to more institutional investors evaluating long positions. The analysts anticipate accelerated Bitcoin ETF inflows in the coming quarters, providing new entry points for institutional demand.
Bernstein’s analysis also suggests that there is significant room for growth in Bitcoin’s portfolio allocations. Currently, institutional investors account for 22% of Bitcoin’s assets under management (AUM), with hedge funds representing approximately 36% of this allocation. The next step for these investors, according to Bernstein, is to evaluate long positions. Financial advisors, particularly those managing smaller to mid-sized portfolios, are starting to drive actual demand by allocating a small percentage to Bitcoin ETFs. The analysts believe that as larger advisors approve ETFs and existing portfolios have more room for allocation, Bitcoin investments will experience further growth.
The analysts at Bernstein compare the current price levels of Bitcoin to previous cycles, suggesting that Bitcoin at $60,000 today is equivalent to Bitcoin under $10,000 in June 2020. Despite the recent rally, they view BTC as still in the early stages of its cycle and attractive at its current levels. They conclude that asset managers have strong incentives to enhance marketing and distribution efforts to scale their crypto business.
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