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Bitcoin Price Rise Forecasted by Bernstein Analysts: ETF Momentum FOMO Propel Crypto Even Higher?

Last Updated February 13, 2024 1:03 PM
Teuta Franjkovic
Last Updated February 13, 2024 1:03 PM

Key Takeaways

  • Bernstein analysts underscore the introduction of Bitcoin ETFs as a driving force behind the anticipated rally.
  • Despite lower public interest, Bitcoin’s recent gains may signify a maturing market less driven by retail speculation.
  • Bernstein forecasts a record Bitcoin rally amidst bullish sentiment and widespread support for its long-term value.

Analysts at Bernstein have made a Bitcoin forecast  that suggests the digital currency is poised for an unparalleled surge.

Bernstein analysts contend that a mix of influences, such as the introduction of Bitcoin exchange-traded funds (ETFs) and an increasing sense of fear of missing out (FOMO) among investors, has the potential to drive the cryptocurrency to new records.

The Best is Yet to Come for Bitcoin, Bernstein Analysts Declare

Bernstein’s analysis centers on several key factors that could unleash Bitcoin’s potential. Chief among these is the recent introduction of Bitcoin exchange-traded funds (ETFs). ETFs provide traditional investors with exposure to Bitcoin without requiring them to navigate the complexities often associated with direct cryptocurrency purchases. The result, according to the analysts, could be a dramatic influx of institutional investment, bolstering demand and driving prices significantly higher.

The analysts also draw attention to the growing mainstream acceptance of Bitcoin. Major corporations are increasingly adding Bitcoin to their portfolios, and countries like El Salvador are now accepting the cryptocurrency as legal tender. This legitimization of Bitcoin on a global scale could fuel mainstream adoption, resulting in a potential explosion in investor demand and catapulting Bitcoin towards new all-time highs.

Even with the considerable advancements Bitcoin has achieved, the present level of enthusiasm hasn’t exceeded the intense highs seen during the memorable bull markets  of 2017 and 2021. Nonetheless, Chhugani and Sapra contend  that the scene is swiftly evolving, emphasizing  that the emergence of Bitcoin exchange-traded funds (ETFs) is crucial in molding the cryptocurrency’s trajectory.

Bitcoin ETFs Emerge as Key Price Catalyst, Signaling Rising Investor Confidence

Analysts have identified the launch of Bitcoin ETFs as a significant force propelling Bitcoin’s price higher. They noted a sharp reduction in outflows from the Grayscale Bitcoin Trust, now down to around $50 million.

Meanwhile, new ETFs have experienced a surge, with nearly $1 billion flowing in during just the last two trading sessions. This trend marks a shift towards greater acceptance of Bitcoin as a conventional investment option, amplified by investors’ fear of missing out (FOMO).

In the wake of growing optimism, the fortitude of Bitcoin investors, colloquially known as “diamond hands ,” has become more evident. These investors have maintained their stakes through the cryptocurrency market’s ups and downs, showcasing a strong conviction in Bitcoin’s long-term prospects.

Analyst Ki Young Ju pointed out  that buyers from the 2021 bull run are approaching their break-even point—a moment they’ve anticipated for nearly three years. This enduring patience and belief in Bitcoin’s value are not only admirable but also signal a positive outlook for the market’s future trajectory.

Bernstein’s forecast of a rally for Bitcoin following its halving event has gained additional support from the successful debut and sustained inflows into ETFs. The analysts believe that these occurrences are more than mere temporary fluctuations; they signify a deeper transformation within the cryptocurrency ecosystem.

Bitcoin Hits $50k Despite Low Public Interest, Signaling Market Shift

Bitcoin’s recent surge past the $50,000 mark  has sparked renewed interest in the cryptocurrency, making its recent achievement all the more remarkable. This milestone comes amidst an all-time low in public interest, at least as gauged by Google search volumes.

The contrasting trends – strong financial performance alongside waning public curiosity – suggest a maturing market  for Bitcoin. Analysts are closely watching this divergence, exploring its potential implications as the cryptocurrency may be leaving behind its earlier era of speculation-driven price swings and entering a new phase of valuation.

Yassine Elmandjra of ARK Invest took to X to highlight  an intriguing trend contrasting Bitcoin’s recent price achievements with its search volume metrics. Traditionally, Google search spikes for Bitcoin have paralleled its price surges, notably during the bull markets of late 2017 and early 2021.

Despite an upward movement in Bitcoin’s price, the search volume has remained notably low. This suggests that the ongoing price rally might not be driven by the usual retail excitement or widespread speculative interest that characterized past cycles.

Caution Urged Amid Bitcoin’s Bullish Trend: MVRV Ratio Signals Potential Corrections

Ali from @ali_charts  has analyzed a recurring pattern where Bitcoin enters short-term correction phases each time the 30-day market value to realized value (MVRV) ratio surpasses 11.50%. With the MVRV ratio crossing this benchmark again, it acts as a warning for traders.

This suggests that, although Bitcoin’s outlook remains predominantly bullish, investors should be prepared for possible corrections along its upward trajectory.

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