Bitcoin & Crypto-Related Stocks Ripe for Institutional Adoption
The cryptocurrency market is poised for a significant transformation as spot bitcoin exchange-traded funds (ETFs) are expected to receive approval from major wirehouses and large private bank platforms in the third and fourth quarters of this year. This move, highlighted in a recent report by broker Bernstein, signals a shift towards broader institutional adoption of bitcoin and crypto-linked stocks. The approval of these ETFs would mark a pivotal moment, offering easier access to Bitcoin for a wider range of investors, thereby enhancing market liquidity and potentially stabilizing prices.
Bernstein's research indicates a bullish future for bitcoin, predicting that its value will reach $200,000 by 2025, $500,000 by 2029, and an astonishing $1 million by 2033. Despite skepticism from crypto bears who argue that the spot bitcoin ETF trade has predominantly attracted retail investors, Bernstein's analysts Gautam Chhugani and Maihka Sapra believe that institutional interest is growing. They see the recent approval of spot bitcoin ETFs in the U.S. as a catalyst for this interest, suggesting that institutional investors are now evaluating net long positions as they become more comfortable with the improving ETF liquidity.
The report underscores that bitcoin ETF inflows are expected to accelerate in the latter half of the year, driven by approvals from large advisory firms and the increased allocation headroom within existing investment portfolios. This growing institutional adoption could serve as a "Trojan horse" for broader acceptance, with investors engaging in the basis trade—buying spot bitcoin ETFs while selling bitcoin futures contracts, then profiting from the price convergence. This strategy is seen as a gateway for deeper institutional involvement in the crypto markets.
Moreover, Bernstein maintains an optimistic outlook on specific crypto-related stocks. The broker has given an outperform rating to bitcoin miners Riot Platforms (RIOT) and CleanSpark (CLSK), as well as to the software company and significant bitcoin acquirer MicroStrategy (MSTR) and the trading platform Robinhood (HOOD). These endorsements reflect a belief in the robust potential of these companies to benefit from the anticipated surge in institutional Bitcoin investment, further solidifying the cryptocurrency's position in the financial mainstream.
