Bernstein Group observes a steady growth in Bitcoin adoption among institutional clients amid the turbulent crypto market.
As Bitcoin and Ethereum plummet further, investors rush to exit the risky assets. The market crash catalyzed by the looming global recession called for experts’ attention to assess the health of the overall crypto market.
On August 5, the Bernstein team projected that macroeconomic and political factors would determine the next direction for Bitcoin. Bernstein forecasted that the macro and political outcome would determine Bitcoin and other crypto assets’ market performance amid the bearish pressure.
Crypto Market Reacts to Macroeconomic Factor
The analyst believed crypto is directly connected to external factors such as the economy and politics. This implies that any changes in macroeconomic factors push the crypto market to react.
The Bernstein team observed that BTC dropped by nearly 20%, hitting its lowest $49,200. On Tuesday, Asian Morning hours, BTC showed signs of recovery to trade at $55,700, a 7.87% increase in a day.
The analyst noted that the market turbulence was driven by fears in the equity market and global economic jitters rather than crypto-related issues. As BTC remains resilient to recent market turmoil, Bernstein remains optimistic that Bitcoin will recover in the long run.
From their analysis, the Bernstein team noted that the market crash did not impact Bitcoin adoption among institutional clients. Bernstein observed that Bitcoin exchange-traded funds (ETFs) and bank approval remained on track amid the turbulent market.
The steepest decline of Bitcoin came days after the Republican nominee, Donald Trump, had promised to make crypto a strategic asset. Trump’s promises renewed investors’ confidence and increased their appetite to profit from the crypto market.
Since then, BTC has established a significant pullback, dropping 30% from its peak to its lowest point. From the price swing, the Bernstein team concluded that the presidential election’s outcome will determine the crypto market’s performance. This implies that the bull might resurface if a pro-crypto candidate wins the election.
Will US Election Impact to Crypto Market?
With the prediction market showing that Donald Trump’s winning chances are higher than the presumptive Democrat nominee, Kamala Harris, experts anticipate that the election will impact the crypto market.
However, in a new poll by MSNBS, Kamala and Trump’s winning odds have narrowed. The poll shows that Trump’s winning chances are 50 while his competitor Kamala reached 49.
The prediction shows that if the election were to be held today, Kamala would receive 81 votes from the black while Trump would secure 18. Experts argued that the narrowing gap between Trump and Harris also contributed to the crypto market crash.
Subsequently, the Bernstein group believes that the November 5 election is a short-term catalyst for the crypto industry. The analyst profiles BTC as a ‘Trump trade’ with the possibility of swaying the crypto market in a direction that favors the former US president and other pro-crypto candidates.
Bernstein Anticipate Equity and Crypto Market to Recover
Despite the volatile crypto market, Bernstein observed that institutional clients remained active with Bitcoin ETF inflows surpassing $17 billion. With financial institutions receiving regulatory approval for Bitcoin and Ether ETFs, Bernstein anticipates more wirehouse approval between Q3 and Q4.
The analyst projects that more on-ramps for asset allocation to Bitcoin will be available in the coming days. However, the Bernstein team anticipates the crypto market will maintain a range-bound until the US election, which is scheduled for November.
From data and analysis, investors seeking exposure to Trump’s trade should consider introducing Bitcoin and other BTC-inspired equities to their respective portfolios before the election.
Trump trade refers to the expectation investors and business people will have if the former US president retakes the White House for the second term. The Americans expect Trump’s leadership to impose low taxes, fewer regulatory requirements, and higher tariffs, fostering growth in the US economy and improving its global competitiveness.
In his previous term, Trump enacted friendly policies that sent the stock issued by American tech and financial sectors to the moon. The increase in stock price strengthened the dollar stability and increased the Treasury returns. Therefore, Berstein expects the Federal Reserve to reduce the interest rate, which would trigger a rebound for equity and crypto markets.
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