Bitcoin (BTC) is poised to break out of crypto winter and potentially outperform the market over the coming months, according to a new research report from the Hamburg-based multinational investment bank Berenberg. The potential is attributed to “a combination of circumstances, evolution, and timing,” and in particular, the upcoming Bitcoin halving event. This event occurs approximately every four years and sees the rate at which new coins are produced and released into circulation cut in half. This, along with the decentralized nature of its blockchain and its classification as a commodity rather than a security by the U.S. Securities and Exchange Commission (SEC), could be a catalyst for Bitcoin price and stock of the largest corporate holder of Bitcoin reserves, MicroStrategy.

Some of the factors that could help Bitcoin appreciation are illustrated by the banking crisis earlier this year which has had a “lingering impact” on traditional finance. This has led to concerns about de-dollarization, in which investors have lost trust in the Federal Reserve due to its perceived mishandling of the interest-rate cycle and are potentially searching for an alternative currency. As such, with the halving event approaching, Bitcoin could potentially highlight its value propositions as an alternative.

Historically, Bitcoin halving events have been associated with a significant increase in the price of the asset, and it is therefore no surprise that the banking crisis and other macro factors have contributed to further potential for Bitcoin appreciation. With the rate at which new bitcoins are produced and released into circulation halved, this makes the asset slightly more scarce and the halving also makes mining less profitable for miners. This can lead to a decrease in the network’s hashrate and increased competition among miners.

At the same time, investors may be increasingly turning to Bitcoin as an alternative currency to ride the rising trend, making it an attractive asset to both institutions and investors alike. Indeed, the stock of MicroStrategy, the largest corporate holder of Bitcoin reserves at about 140,000 BTC, has been performing well and is estimated to gain further momentum with the upcoming Bitcoin halving. Berenberg therefore believes that “the price of Bitcoin could rally ahead of and following this much-anticipated halving,” and cover MSTR with a buy rating and $430 price target.



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