- Bernstein raised their year-end price target for Bitcoin from $60-70K to $90-100K based on a smaller than expected reduction in mining hashrate post-halving.
- Bernstein now forecasts a 7% hashrate drop from miner shutdowns versus a prior 15% estimate, citing stable mining economics and increased institutional adoption driving prices higher.
- The reduced hashrate decline forecast led Bernstein to increase price targets for publicly traded mining companies like CleanSpark, Marathon Digital, and Riot Platforms as profitability is less impacted.
Bitcoin‘s year-end price target was raised to $90K at Bernstein. The broker expects a 7% reduction in hashrate post-halving from shutdowns versus 15% earlier, the report said.
Background
Bitcoin is a decentralized digital currency created in 2009. It is traded between peers without the need for banks or intermediaries. The Bitcoin network is powered by “miners” who use specialized hardware to verify transactions and add new blocks to the blockchain.
Every four years, the Bitcoin protocol reduces the block reward miners receive by 50% in an event known as the “halving.” This reduces the rate of new Bitcoin production and impacts miner profitability.
The Recent Price Target Increase
Analysts at Bernstein recently increased their year-end price target for Bitcoin from $60,000-$70,000 to $90,000-$100,000.
According to the report, Bernstein expects a smaller reduction in mining hashrate after the next halving compared to previous estimates. The analysts now forecast a 7% drop in hashrate due to miner shutdowns post-halving versus a prior estimate of 15%.
A smaller decline in hashrate and mining activity could be positive for Bitcoin’s price. Bernstein’s analysts believe the combination of stable mining economics and increased institutional adoption will drive Bitcoin higher by the end of 2023.
Impact on Bitcoin Mining Stocks
The reduced hash rate decline forecast is also viewed positively for publicly traded Bitcoin mining companies like CleanSpark, Marathon Digital, and Riot Platforms.
With mining profitability impacted less than previously expected, Bernstein’s analysts raised their price targets for these stocks. The report states that the mining sector continues to become more institutionalized over time.
Conclusion
Bernstein’s increased Bitcoin price target and reduced hashrate decline forecast reflect growing institutional adoption. While the next halving will still pressure miner profitability, improvements across the sector should drive Bitcoin’s price higher in 2023. The recent price target increase provides another data point suggesting Bitcoin’s long-term bull case remains intact.
