Bitcoin's (CRYPTO: BTC) breakout to $64,000 has been fueled by several reasons, according to a new Bernstein analyst note.
What Happened: The analysts cite rate cuts, bipartisan crypto support, Bitcoin ETF momentum, miner stability post-halving, and reduced selling pressure as catalysts for Bitcoin's 9% seven-day spike. Ethereum (CRYPTO: ETH) has shown even stronger performance, up 17% on the week.
- Rate cuts and fiscal policy: The 50-basis point rate cut, and record-high gold prices have bolstered Bitcoin as an alternative asset. Bernstein notes that "Any signal of loose monetary policy and potentially weaker dollar, is positive for Bitcoin." Year-to-date (YTD), Bitcoin is up 45%, compared to gold's 27%.
- Bipartisan crypto support: Both Kamala Harris and Donald Trump have signalled support for digital assets, though the crypto community seeks more policy clarity from Harris given the current administration's mixed track record.
- Bitcoin ETF momentum: Despite price volatility, Bitcoin ETF inflows remain positive, totalling $17 billion to date. Bernstein expects "re-acceleration of inflows" as more wirehouses approve the products.
- Miner stability post-halving: Bitcoin network hash power has rebounded to pre-halving levels around 630 EH/s, indicating miners have adjusted to reduced block rewards.
- Reduced selling pressure: Major bitcoin sales by the German and U.S. governments have concluded, while MicroStrategy raised $2.1 billion to acquire more Bitcoin taking its holdings to 252,220 BTC (~1.3% of Bitcoin's total supply).
Also Read: Bitcoin's On-Chain Metrics Are Turning Bullish: What Is Going On?
Why It Matters: Bernstein sees potential upside for Bitcoin mining stocks, which have underperformed year-to-date. The analysts highlight opportunities in pure-play Bitcoin miners like Core Scientific (NASDAQ:CORZ), Riot Platforms (NASDAQ:RIOT), CleanSpark (NASDAQ:CLSK) and Marathon Holdings (NASDAQ:MARA) that may be poised for a rebound.
The report also notes continued strength in crypto-exposed stocks like MicroStrategy (NASDAQ:MSTR) is noted as "the most direct and largest market cap – leveraged equity proxy on Bitcoin price," while Robinhood (NASDAQ:HOOD) is benefiting from increased crypto trading revenues.
As the crypto market digests these bullish factors, Bernstein's analysis suggests the rally may have room to run, particularly if institutional adoption continues to grow through ETFs and other investment vehicles.
What's Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga's upcoming Future of Digital Assets event on Nov. 19.
- Raoul Pal's Chief Crypto Analyst Says The Bull Market Is Back When This Indicator Hits 45% (It's Now At 11%)
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