Bitrabo Editorial
Analysts Gautam Chhugani, Mahika Sapra, and Sanskar Chindalia from Bernstein shared their views on when Bitcoin might enter a bullish phase and achieve new price highs. They also discussed the potential influence of former US president Donald Trump on the future direction of Bitcoin.
Anticipated Bullish Turn for Bitcoin Price
The analysts projected in a research report on August 5 that Bitcoin and the wider cryptocurrency market could see a recovery if equity markets bounce back as a result of Federal Reserve actions. They believe that an impending rate cut and increased liquidity injection by the Federal Reserve could trigger this rebound.
They noted that the recent cryptocurrency market slump was not solely attributable to Bitcoin but was largely driven by concerns in equity markets and other macroeconomic conditions. With the US stock market experiencing a substantial downturn amid recession fears, Bitcoin faced a significant sell-off leading to its drop below $50,000 for the first time since February.
Citing its historical correlation with equities, Bitcoin followed suit in experiencing massive sell-offs over the weekend. Consequently, altcoins also witnessed substantial price declines, aligning with Bitcoin’s downward trend.
Chhugani, Sapra, and Chindalia foresee the prevailing macroeconomic landscape continuing to impact Bitcoin and the cryptocurrency market throughout most of the third quarter. Speculation is rife that the Federal Reserve may cut interest rates at the upcoming FOMC meeting in September, a move that would likely benefit risk assets, including cryptocurrencies.
Notably, there have been calls from market experts such as Jeremy Siegel for an emergency rate cut alongside the anticipated September cut. However, uncertainties prevail over whether the Federal Reserve will yield to such pressures given their current stance that the US economy is not on the brink of a recession.
The upcoming US election is another factor expected to sway Bitcoin and the broader cryptocurrency market, with the analysts contending that Bitcoin stands as a ‘Trump trade.’ They predict that crypto assets will maintain a range-bound trajectory until after the election, with Bitcoin potentially reacting positively to a Trump victory due to his perceived crypto-friendly stance compared to Democratic candidate Kamala Harris.
Continued Bullish Outlook for BTC
Despite recent setbacks, the Bernstein analysts maintain a bullish long-term view on Bitcoin, pointing out that there are currently no notable downsides for cryptocurrencies. They highlighted the institutional adoption trend of Bitcoin through Spot Bitcoin ETFs, which indicates a positive outlook as more institutional investors embrace the flagship cryptocurrency.
Anticipating further wirehouse approvals in Q3 and Q4, the analysts expect increased on-ramps for asset allocation into Bitcoin. Leading financial firm Morgan Stanley has reportedly granted its advisors the green light to offer Spot Bitcoin ETFs to their affluent clients starting August 7.