Analysts from the investment firm Bernstein are optimistic about Bitcoin’s (BTC) future performance. They anticipate that it will continue its upward trajectory, surpassing its previous all-time high of $69,000 and potentially reaching $70,000 within the current year.
The analysts have a strong belief in Bitcoin’s risk-reward profile and do not foresee any significant challenges hindering its upward movement. In an investor’s note, Gautam Chhugani and Mahika Sapra, the analysts, emphasized the recent introduction of 10 Bitcoin spot exchange-traded funds (ETFs) in the United States, which briefly boosted Bitcoin’s price to $49,000.
As of now, Bitcoin is trading around $42,600, and the analysts pointed out that the range between $42,000 and $43,000 is a “no-regrets price with asymmetric upside.” They are making a prediction of a further 65% increase in Bitcoin’s value, expecting it to reach approximately $70,000 by the end of the year.
Four Reasons Why Bitcoin Would Reach $70,000 This Year: Bernstein
The analysts presented four main reasons to support their optimistic outlook.
To begin with, they highlighted the significant influx of funds into ETFs, estimating that approximately 19,000 Bitcoins were added just last week.
According to Bernstein, the increasing demand for ETFs will play a role in influencing Bitcoin’s overall price due to its limited supply curve.
“The ETF trend will continue to have a significant impact on price movement,” the analysts remarked.
“In a commodity with a well-known limited supply curve, any additional buying demand at this magnitude will have a noticeable effect on prices.”
The second reason for their positive outlook is the enthusiastic response from advisor networks regarding the potential inclusion of Bitcoin in client portfolios.
Reportedly, ETF issuers have received unprecedented and rapid feedback, indicating that ETFs have tapped into a sustainable source of long-term demand for Bitcoin.
In a recent report, CoinShares revealed that institutional crypto investment products saw a net inflow of $708 million last week, with Bitcoin accounting for 99% of these inflows.
Favorable Macroeconomic Conditions to Push Bitcoin Price Higher
Bernstein also emphasized favorable macroeconomic conditions as a contributing factor.
The Federal Reserve’s signal of possible interest rate reductions, currently within the range of 5% to 5.25%, diminishes the appeal of savings and encourages investors to look for higher returns elsewhere.
In environments with lower interest rates, risk assets like Bitcoin typically show strong performance.
Furthermore, Bernstein suggested that the outcome of the US presidential election could have an impact on the cryptocurrency market.
A Republican win would imply a change in leadership at the Securities and Exchange Commission (SEC), which might result in a different regulatory approach.
The current SEC chairman, Gary Gensler, has faced criticism from the cryptocurrency industry and lawmakers due to his strict enforcement-oriented approach to crypto regulation.
The bullish perspective on Bitcoin is not unique to Bernstein analysts.
As previously reported, Anthony Scaramucci, the founder and managing partner of the hedge fund SkyBridge, has suggested that the price of Bitcoin could potentially reach $170,000 in the coming year.
Scaramucci’s prediction is based on two key factors: the increasing demand for recently introduced exchange-traded funds (ETFs) and the upcoming halving event scheduled for April.
He elaborated that if Bitcoin were to maintain its current price of approximately $45,000 at the time of the halving, it could experience a significant surge to $170,000 by mid to late 2025.