Bernstein reiterates optimistic view on Bitcoin, expected to return to $150,000 next year

According to the Zhītōng Finance APP, on Monday (May 6), Bernstein reiterated its optimistic outlook on Bitcoin in its latest report, predicting that Bitcoin will return to a price level of $150,000 next year.

Bernstein's senior analyst Gautam Chhugani expressed in the report that the recent drop of Bitcoin to $57,000 does not mean that Bitcoin will continue to decline. In a report co-authored with analyst Mahika Sapra, they mentioned, "Investors have asked us whether we have changed our expectations for Bitcoin reaching $150,000 and whether the price adjustment after the halving event has affected our expectations. If there is an impact, then our view of Bitcoin will only be more optimistic."

They expect the price of Bitcoin to rise by 137% from the current level.

The report points out that the inflow of funds into Bitcoin spot ETFs remains strong, already reaching half of Bernstein's expected full-year trading volume for 2024, even though the year is not yet halfway through. The report states, "The launch of Bitcoin ETFs is one of the most successful ETF issuances in history, and we expect this to continue to drive demand for Bitcoin in the remaining time of this year. Private banks, wealth management institutions, pension funds, and sovereign wealth funds are continuously increasing their allocation to Bitcoin. We expect around $70 billion in new funds to flow into Bitcoin in 2024 and 2025." Approximately $12 billion has flowed into these funds since their establishment.

Despite the continuous outflow of funds last week for 8 days, causing concerns among investors that the trend may reverse, this trend has ended, and even the Grayscale Bitcoin Trust has experienced its first day of inflow, overcoming long-term resistance in the ETF market.

Furthermore, Bernstein also points out that the Financial Accounting Standards Board's updates on rules regarding cryptocurrencies are driving more corporate interest in Bitcoin. For example, despite holding about $840 million worth of Bitcoin, Block (SQ.US) announced that the company will continue to purchase Bitcoin monthly.

The report also mentions that there is strong demand for direct spot Bitcoin purchases, helping to offset recent outflows from ETFs.

The report also emphasizes that the Bitcoin halving event in April did not significantly pressure cryptocurrency mining activities. In this four-year cycle, the token rewards for successful miners will be significantly reduced to decrease Bitcoin's supply. Although this may make mining more competitive, the required computing resources have not significantly increased.

Meanwhile, despite the increase in Bitcoin's value, the prices of mining equipment remain at a low level, increasing the profitability of the industry and maintaining the dominant position of current participants in the field.

Chhugani wrote in the report, "Overall, healthy Bitcoin demand and the continued discipline of the Bitcoin mining cycle allow this Bitcoin boom to last longer. It is very likely to achieve the goal of $150,000 by 2025." Bernstein is not the only institution with a bullish stance. Standard Chartered Bank also predicted in last week's report that although the price of Bitcoin may first adjust to $50,000, it will still reach $150,000 this year