As a seasoned researcher with a knack for deciphering market trends and an unwavering interest in Bitcoin, I find myself intrigued by the latest insights from Bernstein analysts. Their prediction of Bitcoin’s recovery, tied to the response of the Federal Reserve, aligns with my observations on the interplay between traditional markets and cryptocurrencies.
Bernstein analysts Gautam Chhugani, Mahika Sapra, and Sanskar Chindalia offer predictions about when Bitcoin‘s price might surge again and reach new peaks. They also hint at the potential influence of former U.S. President Donald Trump on Bitcoin’s future direction.
When Bitcoin Price Will Turn Bullish Again
According to Bernstein analysts’ research note dated August 5, they anticipate that Bitcoin and the wider crypto market will rebound if there is a recovery in the equity markets. This potential recovery, they believe, could be triggered by actions taken by the Federal Reserve, such as reducing interest rates and increasing the money supply within the economy.
These experts pointed out that the recent crypto market plunge wasn’t primarily caused by Bitcoin this occasion, but rather due to concerns in the equity markets and broader economic factors. At present, the U.S. stock market is experiencing a significant drop as investors fear the possibility of the U.S. economy slipping into a recession.
Over the weekend, Bitcoin, having a historical link with these stocks, underwent a significant sell-off wave, marking the first time its value fell below $50,000 since February this year. This downturn also affected the broader crypto market, leading to substantial price drops for altcoins as well.
Experts Chhugani, Sapra, and Chindalia foresee that macroeconomic factors will likely influence Bitcoin and the broader crypto market throughout much of the current quarter. There’s speculation that the Federal Reserve could lower interest rates at their upcoming FOMC meeting in September, a move that would likely boost assets with higher risk profiles, such as cryptocurrencies.
It’s worth noting that some market experts, including Jeremy Siegel, have advocated for an unexpected rate reduction, along with the one that might occur in September. Yet, it’s unclear if the Federal Reserve will give in to these demands, considering they appear skeptical about whether the U.S. is on the brink of a recession. The final decision remains uncertain.
Analysts believe that the outcome of the US election will influence Bitcoin (BTC) and the overall crypto market. They consider Bitcoin as a ‘Trump trade’ and predict that these digital assets will continue to move within a certain range until after the election results are known. If Trump wins, BTC is expected to respond favorably as he is perceived as more open to cryptocurrencies compared to Democratic nominee Kamala Harris.
BTC’s Outlook Is Still Bullish
Despite a temporary drop, these Bernstein analysts are optimistic about Bitcoin’s future prospects, pointing out that there are no significant drawbacks affecting cryptocurrencies currently. They suggest that BTC‘s institutional adoption, evident through Spot Bitcoin ETFs, offers a positive outlook, as more institutional investors are adopting the leading crypto, indicating a bullish trend.
Financial analysts anticipate an increase in “approvals for wirehouse investments towards Q3 and Q4, which could offer additional avenues for wealthier clients to invest in Bitcoin. Notably, Morgan Stanley is said to have authorized its financial advisors to start offering Spot Bitcoin ETFs to their high-end clients as early as August 7.”
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2024-08-06 20:41