Insights from Bernstein analysts, Gautam Chhugani, Mahika Sapra, and Sanskar Chindalia shed light on the potential bullish turn in Bitcoin’s price and its trajectory, including the influence of former US president Donald Trump.
Anticipated Bullish Turn in Bitcoin Price
In a research note on August 5, Bernstein analysts highlighted their expectation for Bitcoin and the broader crypto market to rebound if equity markets recover, triggered by actions from the Federal Reserve such as a rate cut and increased liquidity injection.
The recent crypto market crash was attributed not to Bitcoin but largely to concerns in equity markets and broader macroeconomic factors. With the US stock market facing a significant decline amid recession fears, Bitcoin experienced substantial sell-offs, slipping below $50,000 for the first time since February.
Chhugani, Sapra, and Chindalia forecast ongoing macroeconomic impacts on Bitcoin and the crypto market during the third quarter, with speculations swirling about a potential interest rate cut by the Fed at its upcoming FOMC meeting in September.
Market experts like economist Jeremy Siegel have urged for an emergency rate cut alongside the projected September cut, but the Fed’s response remains uncertain as they do not believe a US recession is imminent.
The analysts also highlighted the US election as a key factor affecting BTC and the broader crypto market, suggesting Bitcoin as a ‘Trump trade’ that could remain range-bound until after the election, potentially reacting positively if Trump secures another term.
Continued Bullish Outlook for BTC
Despite recent setbacks, Bernstein analysts maintain a bullish stance on Bitcoin in the long run, citing no additional negatives for crypto presently, especially with the trend of institutional adoption via Spot Bitcoin ETFs.
Anticipating more wirehouse approvals in Q3 and Q4, the analysts foresee increased avenues for asset allocation to Bitcoin, with Morgan Stanley reportedly permitting its financial advisors to offer Spot Bitcoin ETFs to high-net-worth clients as of August 7.
Featured image from PCMag, chart from TradingView.com
