Key Points
- Bernstein analysts predict a temporary slowdown in Bitcoin ETF flows, expecting a surge towards a $150,000 target by 2025 end.
- Spot Ethereum ETF rejections could potentially boost Ethereum’s market narrative.
Analysts at Bernstein, a research and brokerage firm, predict a temporary halt in the flows of Bitcoin ETFs. They believe this slowdown will be followed by a significant surge, with Bitcoin reaching their target of $150,000 by the end of 2025.
Bitcoin ETF Flows and Predicted Growth
The analysts noted that Bitcoin ETF flows have indeed slowed down, attributing this to the ‘halving’ catalyst and the successful launch of the ETF. They anticipate this slowdown to be a brief pause before ETFs become more integrated with private bank platforms, wealth advisors, and additional brokerage platforms.
The peak of the spot Bitcoin ETFs inflow was noted on March 12, with a net daily inflow of $1.05 billion as Bitcoin neared its latest all-time high of $73,836. It was suggested that 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.
Despite this, the analysts reiterated their $150,000 cycle target for Bitcoin by the end of 2025. They cited 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.
Potential Impact on Ethereum
The analysts also discussed the potential impact on Ethereum if the U.S. Securities and Exchange Commission denies spot Ethereum ETFs. They believe that an SEC denial could lead to litigation and return the market narrative to Ethereum, arguing that given its under-performance against Bitcoin so far, the risk-reward looks attractive.
They also mentioned that any such outperformance for Ethereum would also revive “ETH-beta” Layer 2 tokens such as Arbitrum, Optimism, and Polygon. They 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.
Other Crypto Niches
Beyond Bitcoin and Ethereum, the analysts outlined several other crypto niches and projects with significant growth potential this cycle. They highlighted Solana’s dominant market share in USDC stablecoin volumes, reflecting its growing dominance in crypto payments. They also mentioned the potential of integrations with Visa, Shopify, and Stripe for more mainstream payments.
The analysts 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. They also highlighted the growing real-world asset market, with tokenized money market funds now exceeding $700 million in assets under management, and total tokenized U.S. Treasuries accounting for $1.3 billion on-chain.
The analysts reiterated their expectation that the total crypto market cap will triple to $7.5 trillion over the next 18 to 24 months.
