Bernstein said the slowdown in Bitcoin ETF flows is a “short-term disruption” and maintains a $150,000 price target.

Analysts at research and brokerage firm Bernstein aren’t worried about a slowdown in Bitcoin exchange-traded fund flows, and say they expect the trend to continue in the “short term” before Bitcoin resumes its rally toward its $150,000 target by the end of 2025. It was expected that there would be a “disruption.”

“Bitcoin ETF flows have slowed due to ‘halving’ catalyst and successful ETF launches. BTC

-1.93%
Returns YTD (up 46%).” Gautam Chhugani and Mahika Sapra wrote in a note to customers on Monday. “We do not expect the slowdown in Bitcoin ETFs to become a worrying trend, but believe it will be a short-term pause before ETFs become more integrated with private banking platforms, wealth advisors and more brokerage platforms.”

As Bitcoin approaches its all-time high of $73,836, inflows into spot Bitcoin ETFs have slowed significantly since peaking at $1.05 billion in daily net inflows on March 12, according to The Block’s data dashboard.

Analysts said it will take time for Bitcoin to become an acceptable portfolio allocation recommendation and for platforms to build a compliance framework for selling ETF products.

However, they cited $12 billion in net inflows into spot Bitcoin ETFs so far and the healthy position of leading Bitcoin miners after the halving amid market consolidation and trading fees normalizing to around 10%, leading to a bullish outlook for Bitcoin by the end of 2025. It reiterated its $150,000 cycle target for the coin. Miner revenue.

Analysts added that Bitcoin has been trading in a range of $62,000 to $72,000 since late February, with no apparent momentum on either side as of yet. According to The Block’s price page, Bitcoin is currently trading at $62,557.

BTC/USD. Image: Block/TradingView.

Spot Ethereum ETF Rejection Could Be Positive for Ethereum

Analysts say the U.S. Securities and Exchange Commission could reject the spot Ethereum ETF by its May 23 expiration date, citing unreliable correlation between the spot and futures markets, but similar to the Grayscale Bitcoin ​ETF, it will likely face legal challenges in court. “It is likely that it will be refuted,” he said. example.

Alternatively, the SEC could deny ether based on the fact that it is a security, the analysts added. But doing so could create an “awkward” situation with the Commodity Futures Trading Commission, which considers Ethereum a commodity, and given that CME already trades Ethereum futures without any securities implications. .

Nonetheless, Chugani and Saffra believe the SEC’s rejection is likely to lead to litigation and could push the market to reverse its stance on Ethereum, arguing that the risk-reward looks attractive given its underperformance compared to Bitcoin so far. I think it’s a possibility. This superior performance against ether will also revitalize “ETH-Beta” layer 2 tokens such as Arbitrum, Optimism, and Polygon, he added.

Additionally, analysts see Ether staking through Lido as a high-beta opportunity and the possible launch of the Eigen token will further encourage and accelerate adoption of the cryptocurrency niche through EigenLayer’s re-staking economy.

Total cryptocurrency market capitalization triples to $7.5 trillion

In addition to Bitcoin and Ethereum, analysts have outlined several cryptocurrency niches and projects with significant growth potential this cycle.

Analysts said Solana’s dominant market share in USDC stablecoin trading volume reflects its growing dominance in the cryptocurrency payments space and its integration with Visa, Shopify and Stripe promises more mainstream payments potential.

Chhugani and Sapra 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.

Analysts also predict a growing real-world asset market, with BlackRock and Franklin Templeton’s tokenized money market fund now exceeding $700 million in assets under management, and total tokenized U.S. Treasury bonds accounting for $1.3 billion on-chain. emphasized. They argued that Chainlink’s data oracle and tokenization platform are a key part of their niche infrastructure.

Product-specific market environment for tokenized government bonds. Image: 21.co/Dune Analytics.

Overall, Bernstein analysts reiterated their expectation that the overall cryptocurrency market capitalization will triple to $7.5 trillion over the next 18 to 24 months.

Cryptocurrency market capitalization. Image: Bernstein.

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