News
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 forecasts to $200,000, from their previous target of $150,000.
Bitcoin and cryptocurrency-related stocks remain undervalued and are ripe for an institutional turnaround as pessimism stemming from past regulatory hurdles fades, analysts wrote in a note Thursday.
“We remain convinced of our thesis on the new Bitcoin cycle,” the analysts wrote, adding that Bitcoin was increasingly adopted by institutional investors and global asset managers. This adoption, they believe, is just the beginning, with the next wave of demand expected to come from cryptocurrency onlookers.
The note highlights that Bitcoin ETFs are far from happening. Since BlackRock (NYSE:) filed for the Bitcoin ETF on June 15, 2023, Bitcoin has risen 150%. Although early allocations to Bitcoin ETFs have been driven by retail investors, with an institutional share at 22%, Bernstein sees strong growth ahead. “We believe Bitcoin ETFs are on the verge of approval from major brokerages and large private banking platforms in the third/fourth quarter,” the analysts noted.
The report also addresses skepticism from bears who argue that ETF flows are not genuine, pointing out that institutional interest is initially driven by “cash & carry trades” rather than “net long” positions. However, Bernstein sees this basic trade as a “Trojan horse” to adopt, with these investors gradually evaluating “net long” positions as they become comfortable with the ETF’s liquidity improving. They expect Bitcoin ETF inflows to accelerate in the third and fourth quarters, considering the current market offers new entry levels before the next wave of institutional demand picks up.
Bernstein’s analysis also reveals that Bitcoin portfolio allocations have plenty of room for growth. 13-F filings show that 22% of AUM is driven by institutional investors, with hedge funds accounting for approximately 36% of the institutional allocation. Analysts believe that the next step for these investors will be to evaluate “long” positions. They also point out that financial advisors, primarily small to medium sized with 0.1-0.3% of their portfolio allocated to Bitcoin ETFs, are starting to drive actual demand.
“We believe growth will be driven by larger advisors approving ETFs and by substantial allocation headroom within existing portfolios,” the note said.
Bernstein draws a parallel between Bitcoin’s current price levels and previous cycles, suggesting that Bitcoin around $60,000 today equates to Bitcoin below $10,000 in June 2020. “Bitcoin, despite its rally, is still in an early stage of cycle and we see it as attractive here,” they noted.
Asset managers have every incentive to push harder on marketing and distribution to expand their cryptocurrency business,” the note concludes.