Investing.com - Major Bitcoin optimists on Wall Street are reassessing their short-term expectations following the recent decline, but their confidence in the long-term direction of the currency remains strong.
Standard Chartered Bank, one of the leading institutions supporting cryptocurrencies, has cut its Bitcoin price forecast in half after a decline in demand from corporate treasuries and a slowdown in ETF fund inflows. The institution now expects the digital currency to reach $150,000 by the end of 2026 instead of its previous estimate of $300,000, and the $500,000 target has been postponed to 2030 instead of 2028.
Bernstein analysts adopt converging forecasts, believing that the price of the digital currency could reach $150,000 by the end of next year and approach $200,000 by 2027. Although the recent price decline has led them to lower their estimates for reaching the $200,000 peak this year, they still believe that Bitcoin has emerged from its historical four-year cycle pattern, which they argue indicates a more stable and deeper growth path.
In light of changing Wall Street expectations and the reflections of institutional purchases,
Market deterioration reshapes the landscape of expectations
And despite the positive outlook, the recent cuts reflect a clear change in tone. Crypto supporters are adapting to a harsher market where Bitcoin has dropped about 30% from its October peak of over $126,000, coinciding with a reversal in institutional purchases. Bitcoin exchange-traded funds recorded outflows of $60 million on Monday.
Confidence temporarily returned on Tuesday, as Bitcoin rose to its highest level in three weeks, gaining up to 3.5% beyond $94,400 in an attempt to regain some lost momentum.
Geoffrey Kendrick, head of digital asset research at Standard Chartered, said that companies that were leading the demand for Bitcoin as an asset in their treasuries no longer have the valuations or motivations driving them to continue buying. He explained that purchases from these entities have reached their end, while fund flows will reappear from time to time, with expectations that prices will remain in a consolidation phase rather than intensive selling.
Slowing fund flows... The last pillars of support
With this source of demand declining, exchange-traded funds have become the only support for the market, but they too are losing momentum. The BlackRock IBIT fund experienced an estimated withdrawal of $2.3 billion last month, the largest monthly redemption and only the second monthly outflow this year. Although the outflows represent only 3% of the fund's total assets, they raised concerns about declining trader confidence, who have long followed a long-term holding strategy.
And despite Bitcoin losing nearly a third of its value, outflows from the twelve funds still represent less than 5% of total assets, according to Bernstein analysts Gautam Chouhani, Mahika Sapra, and Sanskar Chindalia. They see Bitcoin as currently in an extended bullish cycle, with steady institutional buying offsetting the anxious selling from individual traders.
Bernstein's estimates in November suggest that individual traders own nearly three-quarters of the assets in Bitcoin exchange-traded funds, while institutional ownership rose to 28% compared to 20% at the end of 2024. In the long term, analysts expect the digital currency to rise to $1,000,000 by the end of 2033.
