• The latest prediction from Bernstein analysts Gautam Chhugani and Mahika positioned the Bitcoin price to hit $70k this year. 

• They also expect the overall mining operations in the US to grow despite the Bitcoin halving set to slash their rewards by half. 

The impact of the recently approved spot Bitcoin Exchange-Traded Funds (ETFs) on the entire crypto market prices was short-lived as the broader market crawled down the price curve after a few days. Bitcoin (BTC), for instance, has struggled to get back into the $50k zone over the period. Interestingly, analysts at Wall Street brokerage giant Bernstein believe that the impact of the groundbreaking decision by the US Securities and Exchange Commission (SEC) could be felt soon, and could send the Bitcoin price to a new all-time-high level before the year ends.

In a new report published by StreetInsider, analysts Gautam Chhugani and Mahika stated emphatically that the net incremental demand for a commodity with a finite supply is what matters when all other factors are considered equal. 

In a commodity with a known finite supply curve, any incremental buying demand at this scale will become material to price. ETFs are still 3.5% of total supply, and more than 12% of Bitcoin still sits on exchanges, but it is the net incremental demand that counts given the selling pressure is easier to model.

For context, nine US spot Bitcoin ETFs made a trailblazing entry into the market following years of unsuccessful attempts. According to a report, a net of $8 billion has been attracted by the new funds, with the Grayscale fund recording about $6 billion in outflows since its conversion. 

US Bitcoin Mining Operations Expected to Grow 

According to Caroline Mauron, co-founder of digital-asset derivatives liquidity provider Orbit Markets, the Bitcoin price seems to have resumed its run, and the potential momentum of the halving narratives could usher the asset into the $50,000 zone. With the much anticipated halving expected to reduce mining rewards by half, many expect Bitcoin mining operations to slow down. However, Bernstein analysts strongly believe that US Bitcoin mining firms would certainly grow their operations this year. 

We expect 15% of high-cost miners to cut production in the coming halving, but we expect the low-cost and competitive miners to gain relative share (RIOT and CLSK are our preferred picks).

The current price action of Bitcoin is quite encouraging as it made a staggering 4% surge in the last 24 hours, trading at $46,283.41. Bitcoin is also up by 7% in the last seven days as its market cap shoots up to $908,043,327,124. 

According to Chhugani and Sapra, the Bitcoin developer ecosystem would grow as the economic activities from token mints and Non-Fungible Tokens (NFTs) Ordinals would be sustained. On top of that, miners would get more transaction revenues from layer 2s. To them, a positive change in interest rate and the overall macroeconomic landscape could trigger a price surge for the flagship digital asset. Putting their prediction in a nutshell, the Bernstein analysts believe that the Bitcoin price could hit $70k before the end of 2024. 

If the early election trends suggest a change of regime post-elections and with potential changes in the current (crypto unfavorable) leadership at SEC (U.S. Securities and Exchange Commission), Bitcoin and the broader crypto market could rally off those cues, and the rates could add further fuel to the rally.

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