With the price of Bitcoin on the rise once again, cryptocurrency is once again becoming a key talking point amongst investors and analysts
Bitcoin prices
After sizeable gains over the last few weeks, Bitcoin has continued to push higher this week, topping $57,000 on Tuesday. The latest move saw it reach its highest level since November 2021.
For the year-to-date, the premier cryptocurrency has risen 35%, while Tuesday’s more than 4% gains (so far) add to its over 142% climb in the last 12 months.
Research firm Compass Point said in a recent note that BTC and ETH both have both outperformed, and are up significantly since their last report. The move has also driven “strong crypto stock returns,” notes the firm.
For example, Coinbase (NASDAQ:COIN) has climbed over 13% so far this year, while Microstrategy (NASDAQ:MSTR) is up 24.9% in 2024.
Compass Point picked out COIN as a stock they continue to like, maintaining a Buy rating and $235 price target on the name. The firm believes it “will benefit from increased trading volumes as BTC dominance declines and stronger retail mix, higher staking revenue driven by higher ETH/SOL prices, and increased interest income from USDC beginning to take share from Tether while short-term rates remain elevated.”
Bitcoin prices forecast
Looking ahead, Compass Point said they continue to like the set-up for BTC/Crypto and “expect considerable upside in CY24 with BTC exiting the year at ~$85K+ levels driven by ETF inflows outpacing available supply on exchanges.”
The firm highlighted that the prior BTC cycle low occurred in late November 2022 at ~$16.5K levels.
“Since then, we've seen BTC price 3.3x to current ~$55K levels,” added Compass Point. “Overlapping prior 3-year cycles returns off the lows shows a strong relationship, which would suggest considerable continued upside if these trends were to continue before peaking out sometime 2H25 or early CY26.”
Analysts at Compass Point acknowledged that interest rates haven't been this elevated in prior cycles. As a result, they believe “absolute returns likely won't be as high.”
However, they state that “so far, cycles have rhymed.” Until they see trends indicating otherwise, the firm continues to “expect strong BTC price growth post-halving, which have historically been strongest in the first year post-halving before starting to taper off.”
Elsewhere, analysts at Bernstein said in a recent memo that the crypto bull market is getting wider, with the Bitcoin bull market led by constant ETF inflows. The firm said Bitcoin halving is scheduled around April 20, 2024 and the price of the cryptocurrency historically breaks out post the event.
This time, Bitcoin price action looks stronger pre-halving, and in our view will likely sustain momentum for rest of the year,” they wrote. The institutional narrative led by Bitcoin ETFs is driving demand, and Bitcoin being the reflexive asset, we expect higher price will bring higher ETF inflows, leading to new highs in 2024.”