Bernstein analysts predict a significant surge in Bitcoin's value, potentially reaching $150,000 by mid-2025 from its current price of $35,000. This bullish prediction surpasses Bitcoin's all-time high of $67,000 and hinges on the potential approval of a Bitcoin exchange-traded fund (ETF) by the Securities and Exchange Commission (SEC) by the first quarter of 2024.
The forecast suggests that SEC approval could divert approximately 10% of Bitcoin's circulating supply into ETFs. This would provide traditional investors with direct access to Bitcoin, which Bernstein views as a commodity. Currently, Grayscale's Bitcoin Trust (GBTC), which holds about 3% of all Bitcoin, is the only similar investment option available.
Investor optimism remains high despite past SEC resistance to a Bitcoin ETF, bolstered by a key court ruling favoring Grayscale in its lawsuit against the SEC. Further optimism stems from potential ETF involvement by leading asset managers such as BlackRock (NYSE:BLK) and Fidelity.
Bernstein also initiated coverage on several Bitcoin mining companies, predicting that the "halving" event in April 2024 will eliminate less efficient miners and enhance gains for the rest. The analysts favor Riot Platforms (NASDAQ:RIOT) and CleanSpark (NASDAQ:CLSK), market share consolidators with "outperform" ratings due to their counter-cyclical investment strategies and continued investment in Bitcoin self-mining capacity. Conversely, Marathon Digital (NASDAQ:MARA), despite being the largest miner, received a "market-perform" rating with an $8.30 price target due to its higher production costs and reliance on hosting partners.
However, this optimistic scenario faces potential obstacles including ongoing criticism from SEC Chair Gary Gensler, recent legal complications such as the Binance lawsuit, and the fraud trial of former FTX CEO Sam Bankman-Fried, along with FTX's bankruptcy. Despite these challenges, Bernstein's prediction underlines the potential for significant growth in Bitcoin's value, contingent on regulatory developments and the evolving landscape of cryptocurrency mining.
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