Analysts at Bernstein have raised their Bitcoin (BTC) price forecast to $200,000, up from the previous target of $150,000.
The Wall Street experts argue that Bitcoin and crypto-related stocks remain underrated and poised for institutional investment as past regulatory pessimism fades.
In particular, the analysts emphasize their confidence in the “Bitcoin new cycle thesis,” noting increased adoption by institutional investors and global asset managers. They believe this trend is only the beginning, with the next wave of demand expected from those currently on the crypto sidelines.
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Bitcoin ETFs and institutional interest as drivers of gains
The analysts’ note highlights that Bitcoin ETFs are still in their early stages. Since BlackRock (NYSE: BLK) filed its Bitcoin ETF application on June 15, 2023, Bitcoin’s price has surged by 150%.
Initially, Bitcoin ETF allocations were driven by retail investors, with institutional share at 22%.
Bernstein predicts significant growth ahead, expecting Bitcoin ETFs to gain approval at major wirehouses and large private bank platforms by Q3/Q4. Despite skepticism that ETF flows are not genuine, Bernstein views the initial institutional interest driven by the basis of “cash & carry trade” as a “trojan horse” for broader adoption.
As these investors become comfortable with improving ETF liquidity, they will likely evaluate “net long” positions. The analysts foresee accelerated Bitcoin ETF inflows in the third and fourth quarters, providing new entry points before the next wave of institutional demand.
Potential for investors BTC investments to see further growth
Bernstein’s analysis indicates that Bitcoin’s portfolio allocations have significant room for growth. 13-F filings show that 22% of AUM is driven by institutional investors, with hedge funds accounting for about 36% of this allocation. The next step for these investors, according to Bernstein, is to evaluate “long” positions.
Financial advisors, particularly those managing small to mid-sized portfolios with 0.1-0.3% allocated to Bitcoin ETFs, are beginning to drive actual demand. The note suggests that larger advisors approving ETFs and substantial allocation headroom within existing portfolios will drive future growth.
Analyst firm compares current maiden crypto price levels to previous cycles, suggesting that Bitcoin at $60,000 today is akin to Bitcoin under $10,000 in June 2020. Despite the recent rally, they view BTC as still in an early cycle and attractive at current levels, as they conclude that asset managers have strong incentives to enhance marketing and distribution efforts to scale their crypto business.
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