Analysts at Bernstein, a leading asset manager with $725 billion assets under management, are now convinced that Bitcoin (BTC) would hit $150,000.
Bitcoin (BTC) recorded one of its most bullish days yesterday, spiking from a low of $67,232 at the start of the day to a new all-time high of $72,863. The asset breached multiple resistance zones, riding on the massive demand driven by the spot Bitcoin ETF products.
Amid this bullish run, asset manager Bernstein released a note to its clients, calling attention to the cryptocurrency’s impressive performance and reiterating its confidence in more substantial surges.
Bernstein Bullish on Bitcoin Mining Stocks
Interestingly, the note suggested that investors should purchase stocks in Bitcoin mining firms despite these companies currently underperforming Bitcoin. Notably, Marathon Digital (MARA) is down 17.91% over the past two days, while Bitfarms (BITF) has collapsed 15.3% within the same timeframe.
Most of the leading Nasdaq-listed Bitcoin mining stocks, including Riot and Cleanspark, recorded massive slumps yesterday despite Bitcoin’s surge to new all-time highs. Bernstein analysts ascribe this bearish performance to “the last window” of opportunity before the next Bitcoin halving, slated for next month.
Bernstein is convinced that these mining stocks would recover as the bull market progresses. According to the note, the firm emphasized that purchasing these stocks could be the best substitute for a direct investment in Bitcoin itself for investors looking to jump on the ongoing rally.
The halving is expected to cut mining rewards by half, reducing it from the current 6.25 BTC per block to 3.125. Pundits have argued that this event could further put pressure on mining companies, which would see their revenue from block rewards reduced.
However, this is not always the case. For instance, Marathon Digital stock traded at $0.76 in May 2020 before the previous halving. After the halving, MARA surged 181% to $2.14 in October 2020. In addition, Riot rallied 84% from $1.59 to $2.93.
A $150,000 Price Target
Nonetheless, not all Bitcoin mining stocks saw positive returns after the previous halving. Bitfarms dropped 47% to $0.22 after the halving. This trend confirms the assertion that besides the sentiments surrounding the halving event, other factors determine the performance of these stocks.
Bitcoin’s price is also a major determinant of this trend, and Bernstein shows optimism that the asset would exceed expectations. Last October, Bernstein analysts predicted that Bitcoin could hit $150,000 by 2025, citing the potential approval of the spot Bitcoin ETFs.
In the latest note, the firm says it is now “convinced” that this projection would materialize due to Bitcoin’s recent performance and the massive interest commanded by the spot Bitcoin ETF market.
“We are now more convinced about our $150K price. Bitcoin today is at $71K, we expected this to break out post halving. We built Bitcoin institutional flows in our estimates to arrive at Bitcoin price,” Gautam Chhugani, a Bernstein analyst, said.
Chhugani stressed that they initially projected $10 billion worth of inflows to these ETF products this year and $60 billion more by next year. Interestingly, the investment vehicles have already crossed $9.5 billion, with the first quarter of this year still not over.
Due to this extreme bullishness, Bernstein analysts believe the $150,000 prediction is a certainty. According to Chhugani, BTC could witness further integration into traditional finance. The asset currently trades for $71,901, down 0.44% over the past 24 hours.
