Alliance Bernstein Analysts Bullish on Bitcoin Fuelled by ETF FOMO
Alliance Bernstein analysts have, in their recent report, conveyed a bullish forecast for Bitcoin that will fuel the price to higher levels this year.
The analysts acknowledged that Bitcoin was transforming into a hot commodity, given positive market activity following the approval of spot Bitcoin exchange-traded funds (ETFs) on January 10. The Securities and Exchange Commission (SEC) approval allowed ten Bitcoin ETFs to be listed.
The enthusiasm surrounding spot Bitcoin ETFs triggers the question of the extent to which the Bitcoin price can rally. The answer remains uncertain, given the plunge recorded by Bitcoin following the bleeding suffered by Grayscale Investments (GBTC) as investors cashed in to take profits on their position.
The uncertainty is not stopping the analysts from $725B-valued asset manager AllianceBernstein’s optimistic speculations that Bitcoin would realize its all-time high in 2024.
Analyst Gautam Chhugani indicated that the best days for a Bitcoin price rally are in the future. The analyst echoed Mahika Sapra’s perspective that the ETF-fueled rally would translate to a fear-of-missing-out (FOMO) rally.
ETF Inflows and Supply Crunch Fueling Bitcoin Rally
The AllianceBernstein analysts illustrated that the crypto market is embracing the ETF-fueled rally long projected in the race to their approval. The Bitcoin prices are yet to reflect the ETF inflows that would coincide with the supply crunch following the halving event in April.
The halving involves an event integrated into Bitcoin’s source code to occur every four years. It reduces the Bitcoin reward for every block completed in half.
The halving event seeks to keep Bitcoin’s inflation checked since there are only 21 million Bitcoins for minting. The halving event slows the Bitcoin units that enter the market as the reward to the miners identified as the individuals tasked with securing the network.
The analysis considers that investors may reconsider the anticipated supply crunch and rising demand to cash in by selling the Bitcoin triggered by FOMO on the lucrative gains.
The analysts observe that the bulk of the inflows reported by the new ETFs are traced from the retail investors. In particular, the Bitcoin believers acknowledge the discovery of how to access their brokerage accounts.
The Bitcoin believers illustrated that the retail interest within the group is far below the activity witnessed during the 2021 and 2017 rallies. The analysts are optimistic that additional funds would flow into the group.
The analysts illustrated that a mixed group of disbelievers is surprisingly sitting out the investment. Another segment of curious investors who express interest are desirous of acquiring detailed knowledge about Bitcoin.
The new enthusiasts for the largest crypto by market capitalization will allocate additional capital in the subsequent days.
The spot ETFs portray historic success when examined by various metrics. The analysts observed that a month since the Gary Gensler-led SEC approved ten spot ETFs, three issuers have accumulated assets exceeding $1 billion.
BlackRock is leading Fidelity and Cathie Wood’s Ark Invest’s 21Shares in accumulating assets above $1 billion. Fidelity and BlackRock each hold assets valued above $3 billion.
Bitcoin Market Outlook
The optimistic projection illustrates that Bitcoin’s price steadily rises as parties show interest in the growth of ETFs. The price is 7% higher in the seven-day run, 21.5% and 22.8% high in the past fortnight and month, as per CoinGecko data.
The prices portray a steady rise from the temporary plunge following the pressure from the outflow suffered by Grayscale. The bleeding emerged when the Grayscale Investments converted from trust to the spot ETF.
The flows have already slowed, an effect that catapulted the Bitcoin price to exceed $50,000 on Monday.
A review of the market activity shows that Bitcoin trading volume rose by 12% to test $37.101 billion in the past 24 hours, as per CoinGecko data. The increase shows rising market activity.
At press time 13:10 UTC, Bitcoin is exchanging hands at $52,398.54, yielding a market capitalization of $1.028 trillion. Comparatively, the current price is 24.23% lower than matching the all-time high of $69,044.77, attained on November 10, 2021, as per CoinGecko data.
