The analysts forecast that Bitcoin halving next year will be a huge bullish trigger amid increased demand from institutional investors.
Bitcoin (BTC) could rally nearly 100 percent in the coming months according to an analysis conducted by analysts at Berenberg Bank. Analysts from the German-based bank expect Bitcoin price to trade around $56,630 by April next year, the expected timing for the fourth halving event. Led by Mark Palmer, the analysts at Berenberg highlighted that there is an increased demand for the top digital asset thus reiterating its buy rating on MicroStrategy Inc (NASDAQ: MSTR), the largest public company holder of Bitcoin.
Notably, the bank raised its MSTR price target to $510 from $430 based on the fact that the company has been adding more Bitcoins during the crypto winter. According to the latest stock market data MSTR traded around $413 during Wednesday’s after-hours, having gained more than 192 percent YTD.
Undeniably, the Bitcoin halving has triggered a bullish outlook not only for Bitcoin but also for the entire crypto market. Already, the Bitcoin demand from institutional investors has significantly increased based on the ETF frenzy led by BlackRock Inc. (NYSE: BLK).
“Supporting our expectation that bitcoin will appreciate significantly in the coming months is improved sentiment driven by anticipation of the bitcoin halving estimated to occur in April 2024, and keen interest demonstrated by large institutions,” Berenberg analysts noted.
Meanwhile, Berenberg analyst highlighted that MicroStrategy’s Bitcoin holding could increase to $8.74 billion from $6.27 billion by next year’s halving. Additionally, the bank noted that the company’s business intelligence software could be valued at $1.37 billion from $859 million.
Bitcoin and the Market Outlook
The Bitcoin market in the United States could be the only one not subjected to recent regulatory scrutiny by the SEC based on its tokenomics. Notably, the Bitcoin market never undertook an initial coin offering like most altcoins in the early stages. Instead, Bitcoin is available for anyone to mine without a central governing body. Under the Howey test, the SEC argues that most digital assets fall under securities law since there is an investment contract and an expectation of profit derived from the developments of an individual.
“…Under the Howey test, an “investment contract” exists when there is the investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others. Whether a particular digital asset at the time of its offer or sale satisfies the Howey test depends on the specific facts and circumstances,” the SEC argued.
Nonetheless, the SEC has yet to approve any Bitcoin EFT for institutional investors to safely enter the industry. According to the SEC, the Bitcoin market still lacks clarity on trading with the possibility of wash trading.
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