Bitcoin Investment Outlook

Investing.com reports that Bitcoin remains an “attractive” investment in the $95,000 to $98,000 price range for investors with a six-to-twelve-month horizon. Bernstein analysts maintain a 12-month price target of $200,000 for the cryptocurrency.

Bitcoin has surged 27% over the past 30 days, reaching several all-time highs. Last week, after surpassing $100,000, Bitcoin faced its first “leverage flush” as traders adjusted their positions in response to the milestone.

Analysts observed that this dip was mainly due to traders increasing leverage at the $100,000 mark, allowing bears to lessen speculative activity. Analysts led by Gautam Chhugani noted, “Maybe, Bitcoin takes a small ‘holiday breather’ here, before the demand breaks through the $100K wall permanently.”

The world’s largest crypto asset continues to attract robust demand from exchange-traded funds (ETFs) and corporate treasury participants, notably MicroStrategy Incorporated (NASDAQ:MSTR), which has been actively acquiring Bitcoin.

MicroStrategy now holds over 2% of the total Bitcoin supply and has raised equity and convertible debt totaling about $7.3 billion, or roughly 18% of Bitcoin’s market value.

The convertible debt market for Bitcoin is gaining traction, with firms such as Riot Platforms (NASDAQ:RIOT) and Marathon Digital (NASDAQ:MARA) beginning to issue convertible debt for Bitcoin purchases. Recently, MARA raised $1 billion in convertible debt at a 40% premium and a 0% coupon, while Riot announced a $500 million issuance for the same purpose.

Analysts express optimism about the burgeoning convertible market for Bitcoin, highlighting that miners' leverage levels remain low, with RIOT and MARA having negligible debt. Furthermore, miners previously burdened by debt during the 2021-22 cycle have returned in stronger financial positions, citing Core Scientific Inc (NASDAQ:CORZ) as an example.

Overall, analysts believe these developments, combined with ongoing ETF demand, are establishing persistent sources of Bitcoin purchase that significantly exceed current supply levels.