Analysts Predict Market Shift with Trump’s Potential Victory
Analysts at Bernstein suggest that the market hasn’t accounted for possible positive changes in cryptocurrency regulations if Donald Trump wins the U.S. presidential election.
Bitcoin has shown a favorable response to the increased likelihood of a Republican win, reflecting confidence in Trump’s pro-crypto approach ahead of his speech at Bitcoin 2024 in Nashville on July 27. Analysts Gautam Chhugani and Mahika Sapra noted a significant potential for institutional investors to allocate funds to cryptocurrencies and related stocks.
Bitcoin Price Surge
Bitcoin’s price increased approximately 8% over the past week, currently trading at $67,548. The analysts report a resurgence in Bitcoin ETF momentum, highlighted by net inflows exceeding $2 billion in the last two weeks, culminating in total inflows of over $17 billion since January and total assets under management reaching $60 billion.
Performance of Crypto Stocks
Crypto stocks outperformed with a 22% rise last week. Chhugani and Sapra pointed out that high-beta bitcoin proxies, such as large bitcoin mining consolidators (Marathon, Riot, CleanSpark), are expected to excel, driven by underlying bitcoin prices and their aggressive expansion plans. These companies are proactively raising capital to increase their market shares in bitcoin mining.
Conversely, miners like IREN and Core Scientific are developing hybrid strategies, combining bitcoin mining with AI data centers, to maximize efficiencies and yields. The analysts believe that the market undervalues the substantial power access of such miners, anticipating that a considerable portion of their future value will stem from AI activities.
Robinhood and MicroStrategy Insights
The trading app Robinhood is seen as favorably positioned due to its competitive rates and a base of 11 million active, younger traders. The analysts predict a significant rise in crypto transaction revenues post-acquisition of Bitstamp, which could account for 40% of total revenues by 2025, up from 7% now.
MicroStrategy, leveraging a unique bitcoin equity strategy, holds 1.1% of the global bitcoin supply. Analysts project a bitcoin holding value of $41 billion by 2025, contributing to a target stock price of $2,890.
Biden’s Withdrawal
Joe Biden announced his exit from the presidential race on Sunday, endorsing Vice President Kamala Harris as the Democratic nominee, potentially bolstering Trump’s chances. Following this, Biden’s odds of election victory dropped below 1%, while Trump’s improved slightly to 65%.
In June, Chhugani and Sapra updated their bitcoin price predictions to $200,000 by 2025, $500,000 by 2029, and $1 million by 2033. Gautam Chhugani currently holds long positions in various cryptocurrencies.
Comments (0)