Bitcoin ETF Approval Expected Soon: Analysts at Bernstein Highlight Key Factors for Institutional Adoption
Title: Analysts at Bernstein Argue Bitcoin ETF Trade is Far From Over
In a recent note to clients, analysts at research and brokerage firm Bernstein challenged the notion that the spot Bitcoin exchange-traded fund (ETF) trade is “done.” Despite concerns raised by bitcoin bears, the analysts highlighted two key factors that suggest the trade is far from over.
The arguments against the Bitcoin ETF trade center around the belief that early allocations are driven by retail investors, with institutional involvement limited to the basis “cash and carry” trade rather than net long positions. However, the Bernstein analysts pointed out that recent filings revealed institutional participation in spot Bitcoin ETFs was at 22%, and the rising liquidity in CME bitcoin futures contracts post-ETF launch indicated the basis trade.
The analysts also noted that major wirehouses and large private bank platforms are on the verge of approving spot Bitcoin ETFs in the third or fourth quarter of this year. They emphasized that institutional investors are now evaluating “net long” positions as they become more comfortable with improving ETF liquidity.
Furthermore, the analysts highlighted the increased adoption of bitcoin as a treasury reserve asset, with new guidelines making it easier for corporations to hold the asset on their balance sheets. They anticipate fresh demand from corporate treasuries in 2024, driven by companies like MicroStrategy and bitcoin miners.
Despite recent outflows from U.S. spot Bitcoin ETFs, the Bernstein analysts expect net inflows to accelerate in the coming quarters. They suggested that the current choppy markets provide new entry levels before institutional demand picks up, with potential entry points in the low to mid $60Ks/high $50Ks.
In a bold move, the analysts raised their price target for bitcoin to $200,000 by the end of 2025, with a long-term target of $1 million by 2033. They emphasized that the current price range of around $60,000 is equivalent to prices under $10,000 in June 2020, indicating potential for further growth.
Overall, the analysts believe that institutional demand, driven by ETFs and organizational marketing efforts, could propel bitcoin to new heights. They highlighted the opportunity for asset managers to scale their crypto business and predicted significant growth in the industry over the coming years.
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