Analysts at research and brokerage firm Bernstein aren’t worried about the slowing spot bitcoin exchange-traded fund flows, expecting the trend to be a “short-term pause” before bitcoin resumes its bull run toward their $150,000 target by the end of 2025.
“Bitcoin ETF flows have slowed down, with the ‘halving’ catalyst and successful ETF launch, pulling forward 
BTC
-1.74%
returns YTD (up 46%),” Gautam Chhugani and Mahika Sapra wrote in a note to clients on Monday. “We don’t expect the Bitcoin ETF slowdown to be a worrying trend, but believe it is a short-term pause before ETFs become more integrated with private bank platforms, wealth advisors and even more brokerage platforms.”
Inflows for the spot bitcoin ETFs have slowed considerably since peaking at a net daily inflow of $1.05 billion on March 12, as bitcoin approached its latest all-time high of $73,836, according to The Block’s data dashboard.
The analysts said it would take time for bitcoin to become an acceptable portfolio allocation recommendation and for platforms to establish compliance frameworks to sell the ETF products.
However, they reiterated their $150,000 cycle target for bitcoin by the end of 2025, citing the $12 billion of spot bitcoin ETF net inflows so far and the healthy position of leading Bitcoin miners post-halving amid market consolidation and transaction fees normalizing at around 10% of miner revenues.
Bitcoin has been trading in the $62,000 to $72,000 range since late February, with no clear momentum on either side of that so far, the analysts added. Bitcoin is currently trading at $62,557, according to The Block’s price page.
BTC/USD. Image: The Block/TradingView.
Spot Ethereum ETF denials could be bullish for ether
The analysts said that while the U.S. Securities and Exchange Commission may deny spot Ethereum ETFs by the May 23 due date on the grounds of unreliable correlation between spot and futures market, that would “likely be disproved” in court, similar to the Grayscale Bitcoin ETF case.
Alternatively, the SEC could deny on the basis of ether being a security, the analysts added, though that would create an “awkard” situation with the Commodity Futures Trading Commission, which considers it a commodity, and given the CME already trading ether futures without any securities implications.
Regardless, Chhugani and Sapra think an SEC denial would likely lead to a path of litigation and return the market narrative to ether, arguing that given its under-performance against bitcoin so far, the risk-reward looks attractive. Any such outperformance for ether would also bring “ETH-beta” Layer 2 tokens such as Arbitrum, Optimism and Polygon back to life, they added.
Furthermore, the analysts see ether staking via Lido as a high-beta opportunity and EigenLayer’s restaking economy, amid the potential launch of the Eigen token, to further incentivize and accelerate the adoption of the crypto niche.
Total crypto market cap to triple to $7.5 trillion
Beyond Bitcoin and Ethereum, the analysts outlined several other crypto niches and projects with significant growth potential this cycle.
Solana’s dominant market share in USDC stablecoin volumes reflected its growing dominance in crypto payments and that integrations with Visa, Shopify and Stripe were promising for more mainstream payments potential, the analysts said.
Chhugani and Sapra see Uniswap, GMX and Synthetix as the best DeFi sector proxies, and the Ronin blockchain, with 11 new games and a monthly active user base of around 3 million, as a crypto gaming proxy.
The analysts also highlighted the growing real-world asset market, with BlackRock and Franklin Templeton’s tokenized money market funds now exceeding $700 million in assets under management, with total tokenized U.S. Treasuries accounting for $1.3 billion on-chain. They argued Chainlink’s data oracle and tokenization platform was a key part of the niche’s infrastructure.
Market Landscape of Tokenized Government Securities by Product. Image: 21.co/Dune Analytics.
Overall, the Bernstein analysts reiterated their expectation that the total crypto market cap will triple to $7.5 trillion over the next 18 to 24 months.
Crypto market cap. Image: Bernstein.
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