Bitcoin 
BTC
+0.23%
’s recent $10,000 retreat from all-time highs of more than $73,000 to around $63,000 represents a temporary “dip buying opportunity” ahead of the halving event in April, according to analysts at research and brokerage firm Bernstein.
“We believe the current phase of bitcoin consolidation is temporary and offers a dip buying opportunity prior to the Bitcoin halving,” Bernstein analysts Gautam Chhugani and Mahika Sapra wrote in a note to clients on Tuesday. “We continue to see a cross-cycle 18 month opportunity with bitcoin and the entire crypto ecosystem.”
“We expect the market to consolidate prior to the halving and then expect the overall bull markets to continue,” they added.
Bitcoin halvings are programmed to occur automatically every 210,000 blocks — roughly every four years. The next halving event, expected on April 20, will see the reward subsidy for miners on the network drop from 6.25 BTC to 3.125 BTC per block. However, they continue to earn additional transaction fees for each block mined.
U.S. spot bitcoin exchange-traded funds remain a significant factor in the market. Grayscale’s converted GBTC fund witnessed record daily outflows of $642.5 million on Monday, leading to a total net outflow of $154.4 million yesterday for the first time since March 1.
“ETF flows are reflexive — higher on the way up and slower with weaker price action,” the Bernstein analysts noted. However, as bitcoin’s price action has historically consolidated ahead of the halving, and considering the rally it experienced both in the run-up to spot bitcoin ETF approvals and following substantial net inflows since their launch on Jan. 11, the recent price action is not surprising. “The correction seems healthy and does not affect our cross-cycle view, i.e that bitcoin is headed to $150,000 as the cycle high by 2025,” Chhugani and Sapra wrote.
Bitcoin price action around halvings. Image: Bernstein.
Bitcoin is currently trading at $63,626, according to The Block’s price page. The cryptocurrency is down 7% over the past 24 hours and 12% over the past week. However, it remains up around 50% year-to-date.
Bitcoin’s path toward $150,000
Last week, Bernstein argued that public miner stocks remain the best equity proxy to bitcoin as its price heads toward their 2024-2025 cycle target — especially given a recent period of underperformance.
The analysts said they were particularly focused on Riot Platforms and CleanSpark, suggesting that at current bitcoin price levels and above — even if their production costs were to double after the halving — the miners would generate around 70% and 60% gross profit margins, respectively.
Later in the week, Chhugani and Sapra predicted the overall crypto market cap could surge threefold to $7.5 trillion by the end of 2025, led by the Bitcoin and Ethereum ecosystems amid “unprecedented” institutional adoption.
“We expect total crypto market cap to reach $7.5 trillion by 2025 vs. $2.6 trillion today, led by Bitcoin ($3 trillion by 2025), Ethereum ecosystem ($1.8 trillion by 2025) and leading blockchains e.g. Solana, Avax, etc. ($1.4 trillion by 2025),” the analysts said at the time. They argued that blockchain gaming would be “the killer consumer app of this cycle,” with gaming tokens growing to a $200 billion market.
Bitcoin market cap predictions. Image: Bernstein.
The analysts also initiated coverage on Robinhood stock with an outperform rating, suggesting it was “riding on the crypto comeback arc” as a higher beta play.
Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.
© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.