- Bernstein has reassured that institutional buyers have not been deterred by Bitcoin’s recent $20,000 drop
- Bernstein has stated that the US election and ETF options ensure Bitcoin’s long-term success prospects remain intact
- Bernstein has anticipated more investment avenues to open in late 2024, attracting more institutional buyers
Asset manager Bernstein has offered some words of solace following Bitcoin’s week-long $20,000 drop, claiming that institutional buyers will not be put off by the drop. The company, which in June said Bitcoin could hit $200,000 this year alone, believes that the US election and the glut of ETF options will ensure that the prospects of Bitcoin’s long-term success have not been affected. Bernstein added that it expects more avenues for investment to open up in the second half of 2024, bringing more institutional buyers to the table.
Fundamentals Not Affected
While inexperienced crypto traders wee tearing their hair out and shouting at their screens, Bernstein was on the positive, sending a note to its clients in which it reassured them that all was still well in the crypto world.
The asset manager identified macroeconomic factors and political developments as pivotal influences on Bitcoin’s performance in the third quarter of 2024, attributing the recent decline to “fears in equity markets” and broader economic concerns rather than issues specific to the cryptocurrency market.
Despite recent volatility, Bernstein maintains a positive outlook on Bitcoin’s long-term potential, saying, “We don’t see any incremental negatives for crypto here. Bitcoin’s institutional adoption trends – ETF inflows and wirehouse/bank approvals remain on track.”
Its analysts identified the US presidential election in November as a crucial short-term driver for the crypto markets, noting that “Bitcoin remains a ‘Trump trade’,” with the crypto markets generally viewing former President Trump as a crypto-friendly candidate.
Best Could be Yet to Come
Bernstein’s report also highlighted the growing institutional involvement in the crypto space, noting that Bitcoin ETFs have seen steady inflows exceeding $17 billion year-to-date and believing that more is to come:
We expect more wirehouse approvals into Q3 and Q4, thus providing further on-ramps for asset allocation to Bitcoin.
Looking ahead, Bernstein anticipates that Bitcoin and crypto markets will likely remain “trading off catalysts such as the Presidential debate and the final election outcome,” although a Harris win could dent its high hopes.
However, it also cautions that Bitcoin will likely follow equity markets, which could be driven by a Federal Reserve response to fears of a recession, noting, “we would expect Bitcoin and crypto markets to follow” traditional markets in whichever direction they move.
