Bitcoin is hovering at $43,000, Bernstein gives five reasons why it will rise to $70,000 by 2025

It was another day of consolidation for the cryptocurrency market as Bitcoin (BTC) continued to hover around the support at $43,000, almost exactly in the middle of the range in which it has been trading since December 4th.

Stock performance was also muted as several Fed officials reiterated Powell's message that interest rates could stay higher for longer, giving investors pause before pouring more money into the markets.

Loretta Mester, president of the Cleveland Fed, said: “It would be a mistake to cut interest rates too early or too quickly without sufficient evidence that inflation is on a sustainable and timely path back to 2%.” However, believes She also said the central bank “will gain that confidence later this year and then we can start cutting interest rates” once the economy recovers as expected.

Minneapolis Fed President Neel Kashkari said that while recent inflation data was surprisingly positive, the Fed is “not quite there yet” when it comes to addressing higher prices.

At the closing bell, the S&P, Dow and Nasdaq all closed in the green, up 0.23%, 0.37% and 0.07%, respectively.

Data provided by TradingView shows that Bitcoin rose from support at $42,600 in the early hours of the morning to a high of $43,375 in the afternoon and has since fallen back to $43,100, where it is trading at the time of writing .

BTC/USD Chart from TradingView

According to analysts at Bernstein, Bitcoin will soon resume its uptrend and is expected to surpass its previous all-time high of $69,000 before the end of 2024, which would represent a 65% increase from the current price.

Analysts highlighted five potential catalysts that could lead to this outcome. First up was the recent launch of 11 spot BTC ETFs.

“For a commodity with a known finite supply curve, any additional buying demand of this magnitude will be material to the price,” analysts Gautam Chhugani and Mahika Sapra said in the note. “ETFs still represent 3.5% of total supply and more than 12% of Bitcoin is still on exchanges, but it is the additional net demand that counts as selling pressure is easier to model.”

They noted that adoption of ETFs by national financial advisor networks is increasing, according to reports from top ETF providers, which is the second catalyst.

The third reason is the continued growth of the US crypto mining industry, which is increasing in size and has recently shown increased financial stability.

“We expect 15% of high-cost miners to cut production in the upcoming halving, but we expect the low-cost and competitive miners to gain a relative share (RIOT and CLSK are our preferred favorites),” said she.

The launch of a functional layer two network expected in the fourth quarter of 2024 was the fourth catalyst highlighted. This increases the efficiency of transactions on the network, reducing the cost of on-chain peer-to-peer (P2P) BTC transfers and the use of Bitcoin as collateral for lending and decentralized finance (DeFi) activities.

“We also expect that Layer 2s will continue to drive transaction revenue for miners and economic activity from token mints and NFT ordinals will continue as the Bitcoin developer ecosystem grows,” the analysts said.

The final catalyst is a favorable macroeconomic situation with possible interest rate cuts improving the outlook, while cryptocurrencies have historically performed well in US election years

“If early election trends indicate a post-election regime change and possible changes in the SEC’s current (crypto-unfavorable) leadership, Bitcoin and the broader crypto market could see a rebound based on these signals, and interest rates could add even more fuel to the rally.” ,” Said.

Analysts addressed Bitcoin's sideways movement near $43,000, saying the current price range represents a “no-regrets price with asymmetric upside potential.”

Token airdrop excites crypto traders

The top 200 altcoins traded mixed on Tuesday, with the majority of tokens posting gains.

Daily cryptocurrency market performance. Source: Coin360

Dymension (DYM) led the pack with a 40% gain in a positive trading day after the project distributed millions of tokens to early adopters. Chromia (CHR) was the second biggest gainer, up 19.1%, followed by Nervos Network (CKB) up 18.7%. Privacy token Monero (XMR) was hit hard by the Binance delisting, falling 35% to $107.76, while Frax Share (FXS) fell 11.3% and Helium Mobile (MOBILE) fell 7.7% .

The total cryptocurrency market cap is currently $1.66 trillion, and Bitcoin’s dominance rate is 51%.

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