Halving Challenge $150,000 Target Price
Impact of Halving on Price
Impact on Miners
With less than three days left until the Bitcoin halving, AB Bernstein’s Gautam Chhugani and Mahika Sapra sent a report to their clients today stating that Bitcoin’s price will continue to rise after the halving, challenging the $150,000 target price. The report stated:
It is worth mentioning that this viewpoint echoes the perspective of Bloomberg ETF analyst Eric Balchunas. According to reports, Eric Balchunas stated in an interview with The Block last month that a Bitcoin spot ETF will land on the trading platforms of major brokerages in the coming months, which will bring more exposure and channels for Bitcoin spot ETFs, serving as a catalyst for the next Bitcoin rally.
Historically, Bitcoin halvings have been significantly correlated with price fluctuations in the cryptocurrency. Although not a direct causal relationship, these events often herald large-scale bull markets in the Bitcoin market.
The analysts at Bernstein stated that the halving itself will not cause an increase in Bitcoin’s price; what is important is whether new demand can emerge. Although miners will receive fewer Bitcoin rewards after the halving, resulting in a reduction in the Bitcoin sold to the market, this potential selling pressure has significantly decreased over time. The report stated:
The analysts further noted that demand catalysts usually emerge after the halving event. Examples include the liquidity during the post-pandemic period in the 2020/21 cycle and the Bitcoin purchases by companies such as Tesla, Square, and MicroStrategy. The demand in this cycle will be driven by the approval of Bitcoin spot ETFs and major global asset management firms.
In negative news regarding the impact on miner income, many stocks have dropped by 15-20% in the past 30 days, and no publicly traded cryptocurrency mining company has outperformed Bitcoin since the beginning of the year. Some miners still have historically high US dollar income, providing a solid balance sheet and relatively low debt before the halving.
Bernstein predicts that the halving will reduce approximately 7% of the hash rate, with the hash rate concentrated in four major publicly traded mining companies: CleanSpark, Marathon, Riot Platforms, and Cipher Mining.
However, the analysts noted that if Bitcoin’s price were to substantially decline (for example, returning to $40,000 or lower), we might see a more drastic reduction in network hash rate. Nevertheless, Bernstein believes that the likelihood of such an adverse situation occurring is low, as the company’s analysts believe that the structural demand for ETFs has not yet been fully unleashed (with $12 billion in actual inflows so far this year and an estimated $80 billion expected to flow in 2024-25).
The analysts reiterated their perspective, stating that after the halving, the stock performance of top public miners may outperform Bitcoin in the next 12 months, with increased market share, strong revenue, and growth in capacity pipelines.
