Bitcoin’s Recent Retreat Represents a Buying Opportunity Ahead of the Halving Event, Say Analysts
Bitcoin’s recent drop from its all-time high of over $73,000 to around $63,000 is seen as a temporary dip by analysts at Bernstein. They believe that this dip presents a buying opportunity for investors before the upcoming halving event in April. The analysts expect the market to consolidate prior to the halving and then continue with the overall bull market. Bitcoin halvings occur every four years, and the next one is scheduled for April 20. During the halving, the reward subsidy for miners on the network will decrease from 6.25 BTC to 3.125 BTC per block.
The analysts also noted that U.S. spot bitcoin exchange-traded funds (ETFs) are playing a significant role in the market. Grayscale’s GBTC fund experienced record daily outflows of $642.5 million on Monday, resulting in a total net outflow of $154.4 million yesterday, marking the first time since March 1. However, the analysts pointed out that ETF flows are reflexive and tend to be slower with weaker price action.
Bitcoin’s Path Towards $150,000
Bernstein previously stated that public miner stocks are the best equity proxy to bitcoin as it heads towards their 2024-2025 cycle target. The analysts highlighted Riot Platforms and CleanSpark as particularly promising stocks, noting that even if their production costs were to double after the halving, they would still generate substantial gross profit margins.
In addition to their bullish outlook on miner stocks, Chhugani and Sapra predicted that the overall crypto market cap could triple to $7.5 trillion by the end of 2025. They expect Bitcoin to reach a market cap of $3 trillion by that time, with the Ethereum ecosystem reaching $1.8 trillion. The analysts also anticipate significant growth in other leading blockchains, such as Solana and Avax, which could reach a combined market cap of $1.4 trillion. They believe that blockchain gaming will be the killer consumer app of this cycle, with gaming tokens growing to a $200 billion market.
The analysts also initiated coverage on Robinhood stock, giving it an outperform rating. They see Robinhood as benefiting from the crypto comeback and consider it a higher beta play.
Bitcoin’s Current Trading Status
As of now, Bitcoin is trading at $63,626, experiencing a 7% drop over the past 24 hours and a 12% drop over the past week. However, it is still up around 50% year-to-date.
Hot Take: Bitcoin’s Dip Buying Opportunity Ahead of Halving Event
Analysts at Bernstein believe that Bitcoin’s recent retreat presents a temporary dip buying opportunity for investors before the halving event in April. They expect the market to consolidate prior to the halving and then continue with the overall bull market. The analysts also predict that Bitcoin could reach a market cap of $3 trillion by 2025, while the overall crypto market cap could triple to $7.5 trillion by that time. They see public miner stocks and blockchain gaming as promising investment opportunities in this cycle.
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