Alliance Bernstein, an asset management company recently discussed the direction of Bitcoin after its upcoming halving event. In a client note released on Wednesday analysts Gautam Chhugani and Mahika Sapra anticipate a trend, for Bitcoin post halving attributing it to changes in mining hash rates and increased inflows to exchange traded funds (ETFs).
While there was a dip in ETF inflows over the ten days the analysts remain optimistic about Bitcoins long term potential. They emphasized the importance of demand for Bitcoin, which they believe will be supported by the integration of spot bitcoin ETFs with wirehouses and Registered Investment Advisors (RIAs).
“We believe that integrating spot bitcoin ETFs with wirehouses and RIAs will maintain demand for bitcoin. We anticipate that Bitcoin will reach a peak of $150,000 by 2025 ” stated the analysts.
This forecast aligns with Bernsteins prediction from November year that Bitcoin could hit $150,000 by 2025 due to positive expectations around potential approval of spot bitcoin ETFs, by the U.S. Securities and Exchange Commission (SEC).
The analysts also discussed the impact of the Bitcoin halving event, which traditionally reduces the reward, for mining blocks leading to a decrease in the rate at which new bitcoins enter the market. Chhugani and Sapra noted that after the halving the decrease in selling pressure from miners is no longer as significant. They believe that new factors driving demand are crucial in influencing Bitcoins price increase each cycle.
“In cycles a surge in Bitcoins price has consistently followed the halving event, a few months later. However in this 2024 cycle approvals for ETFs in January led to price growth before the halving with Bitcoin rising by 50% to reach all time highs. Recently over the 10 days with slower ETF investments (and notable GBTC sales) Bitcoin has experienced a correction of around 15% ” stated the analysts from Bernstein.
They also speculated about a price decline; “If the Bitcoin price experiences a notable drop, down to levels around $40,000 or lower, we might witness a more pronounced decrease, in network hash rate.”However we think the likelihood of this situation is reduced, as there is still demand, for structural ETFs with $12 billion in actual inflows so far this year compared to an estimated $80 billion inflow by 2024 25.”
The analysis from Alliance Bernstein comes at a time for Bitcoin as investors and observers of the market anticipate the halving event as a trigger, for future price changes.
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