According to “The Block”, analysts at research and brokerage firm Bernstein said that the market has not yet priced in a potential positive shift in cryptocurrency regulation in the event of a victory for U.S. presidential candidate Donald Trump.
Analysts Gautam Chhugani and Mahika Sapra wrote in a note to clients on Monday that the price of Bitcoin reacted positively to the increased odds of a Republican victory following Trump’s speech at Bitcoin 2024 on July 27. Previously, the market was confident in its pro-crypto stance. “We see significant room for growth from institutional investor allocations to cryptocurrencies and crypto stocks,” the analyst added.
Bitcoin has gained about 8% in the past week and was trading at $67,610 at press time. Bernstein analysts said that "the momentum of Bitcoin ETFs is back", with net fund inflows exceeding $2 billion in the past two weeks, and total inflows into these ETFs since their launch in January have exceeded $17 billion, with assets under management Reaching $60 billion.
View Cryptocurrency Stocks as High Beta Bitcoin Proxies
Cryptocurrency-related stocks have performed even better, rising 22% last week, and Chhugani and Sapra outlined the impact of several crypto stocks within Bernstein’s coverage that they view as high-beta proxies for Bitcoin. .
The two analysts expect large Bitcoin mining companies like Marathon, Riot and CleanSpark to outperform, with their price movements driven by the relative Bitcoin price and potential cash flow from their aggressive operational expansion plans. push. Chhugani and Sapra said the companies have no qualms about raising funds to expand their Bitcoin mining market share.
In addition, other Bitcoin mining companies are pursuing a strategy that combines Bitcoin mining and AI data centers , such as IREN and Core Scientific, to utilize important power access through AI data center renovation and new construction to maximize revenue. . Analysts say the market has underestimated the power access capabilities of these Bitcoin mining companies and expects a large portion of their future corporate value to come from AI projects.
Analysts also believe that stock and cryptocurrency trading app Robinhood is well-positioned in the market due to its competitive rates and its audience of 11 million young active traders. Chhugani and Sapra expect the company's cryptocurrency trading revenue to grow significantly after acquiring cryptocurrency exchange Bitstamp , accounting for 40% of total revenue by 2025, from just 7% currently.
Finally, analysts view MicroStrategy as an aggressively leveraged Bitcoin equity strategy, with the firm holding 1.1% of the total global Bitcoin supply using a combination of equity and long-term convertible debt . Chhugani and Sapra said MicroStrategy shares are trading at a premium for its active strategy, with the value of its Bitcoin holdings expected to reach $41 billion by 2025, supporting a $2,890 price target.
In June of this year, Chhugani and Sapra predicted that Bitcoin prices would rise to cycle highs of around $200,000 by 2025, $500,000 by 2029, and $1 million by 2033.
