According to a report by 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 already 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 are likely from arbitrage trading, and retail investors are not yet the “key driving factor” for such fund products.
Bernstein analysts Gautam Chhugani and Maihka Sapra wrote, “While this is the case, we believe that Bitcoin ETFs are likely to gain approval from major broker-dealer and large private banking platforms in the third/fourth quarter.”
The analysts stated that institutional basis trading seems to be the “adopted Trojan horse,” and these investors are currently evaluating net long positions as they become increasingly satisfied with ETF liquidity. Basis trading involves buying Bitcoin spot ETFs while selling Bitcoin futures contracts and waiting for prices to converge.
The report expects the inflow of funds into Bitcoin ETFs to accelerate in the third and fourth quarters, with the next phase of adoption driven by large advisors approving ETFs and allocating excess capital from existing portfolios.
Bernstein also predicts that the price of Bitcoin will reach a cycle high of around $200,000 by 2025, $500,000 by 2029, and $1 million by 2033.
In addition, 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 Bitcoin reaching $150,000 prediction for next year.”
