According to a report from CoinDesk, brokerage firm Bernstein stated in a research report on Wednesday (19th) that Bitcoin (BTC) and cryptocurrency-related stocks are undervalued, and the timing for institutional adoption is ripe.
Bernstein pointed out that cryptocurrency bears believe that the trading of Bitcoin spot ETF has ended, with most early allocations coming from retail investors, and most institutional demand is for “basis trading” rather than new net long positions. Raoul Pal, CEO of macro research firm Real Vision, also stated last week that about two-thirds of the net inflows into Bitcoin spot ETFs may come from arbitrage trading, and retail investors are not the “key driving factor” for such funds.
Analysts Gautam Chhugani and Maihka Sapra at Bernstein wrote, “While this may be the case, we believe that Bitcoin ETFs are likely to gain approval from major brokerage firms and large private banks in the third/fourth quarter.” The analysts stated that institutional basis trading appears to be the “adopted Trojan horse,” and these investors are currently evaluating net long positions as they become increasingly satisfied with the liquidity of ETFs. Basis trading involves buying Bitcoin spot ETFs while selling Bitcoin futures contracts and then waiting for the price to converge.
The report expects an acceleration of fund inflows into Bitcoin ETFs in the third and fourth quarters, with the next phase of adoption driven by large advisors approving ETFs and allocating from existing portfolios.
Bernstein also predicts that the price of Bitcoin will rise to around $200,000 by 2025, $500,000 by 2029, and $1 million by 2033.
Additionally, Bernstein gave “outperform” ratings to Bitcoin mining companies Riot Platforms and CleanSpark, which are listed in the United States. The brokerage firm also gave “outperform” ratings to software company MicroStrategy and trading platform Robinhood, both of which hold a significant amount of Bitcoin.
Related report: “Bernstein believes the bull market is not over, reiterates prediction of Bitcoin reaching $150,000 next year.”