Analysts at Bernstein predict that by mid-2025, Bitcoin will have risen 337% to $150,000, marking the start of a new cycle for the largest cryptocurrency globally.
Bitcoin is about to see some potentially significant changes in the industry market, such as its impending halving and the likely approval of the first spot bitcoin ETFs, according to a note from Bernstein that started covering cryptocurrency miners.
The report, written by Global Digital Senior Analyst Gautam Chhugani, stated: “You may not like bitcoin as much as we do, but a dispassionate view of bitcoin as a commodity suggests a turn of the cycle.” “A good idea is only as good as its timing.”
The note claims that historically, bitcoin has increased in value whenever there has been a halving—a prearranged occasion when the quantity of bitcoin received for mining the cryptocurrency is lowered. This occurs every four years; in April 2024, there will be another halving.
Because the supply of bitcoin is effectively reduced by the halving, miners are less inclined to sell their token holdings because they expect prices to rise in the future. According to Bernstein, 70% of bitcoin tokens have not sold in the previous 12 months.
The Securities and Exchange Commission is anticipated to approve spot bitcoin ETFs shortly, which is contributing to the surge in demand for the currency from new investors.
Despite the SEC’s initial attempts to thwart these initiatives, a court ruling in August over its denial of a Grayscale cryptocurrency exchange-traded fund (ETF) may have opened the door for a regulatory reversal.
“We expect US regulated ETFs to be the watershed moment for crypto and we expect an SEC approval by late 2023/Q1, 2024,” Chhugani stated. “After the halving, we anticipate that at its peak, miner sales will be outpaced by the demand for bitcoin via ETFs by a factor of 6-7. By 2028, we anticipate that bitcoin ETFs will account for 9–10% of all bitcoin in circulation.”
Analysts predict that bitcoin will rise during the ETF approval process and the first reaction following an approval, then experience some profit-taking prior to the halving and a “major inflection” following the halving.
The crypto mining sector will be impacted by the halving, which will increase consolidation. High-cost miners will be under the greatest pressure when the quantity of rewarded tokens decreases, and the least productive ones will probably not make it, which will cause consolidation.
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