Bitcoin‘s performance in the third quarter is expected to be significantly influenced by macroeconomic conditions and political developments, according to analysts from Bernstein. In a note released on Monday, Bernstein noted that Bitcoin underwent a substantial correction over the weekend, continuing into Monday. This decline was attributed to “fears in equity markets” and broader economic concerns, rather than issues intrinsic to the cryptocurrency sector.
Despite recent volatility, Bernstein maintains an optimistic long-term outlook for Bitcoin. The firm stated, “We don’t see any incremental negatives for crypto here. Bitcoin’s institutional adoption trends—ETF inflows and wirehouse/bank approvals—remain on track.”
Bernstein highlighted the upcoming U.S. presidential election as a critical short-term catalyst for the cryptocurrency markets. The analysts emphasized that “Bitcoin remains a ‘Trump trade,'” with the markets generally perceiving Donald Trump as a crypto-friendly candidate.
The report indicated that the narrowing odds between Trump and Vice President Kamala Harris have contributed to Bitcoin’s recent weakness. Data from decentralized prediction market Polymarket shows Trump with 54% and Harris with 43% support.
On the topic of institutional involvement, Bernstein pointed to recent approvals from major financial institutions. They stated, “We expect more wirehouse approvals into Q3 and Q4, thus providing further on-ramps for asset allocation to Bitcoin.”
The analysts advised that investors looking to gain from a potential “Trump trade” might consider adding Bitcoin or Bitcoin-related equities to their portfolios. They also noted that if broader equity markets recover due to a Federal Reserve response, “we would expect Bitcoin and crypto markets to follow.”
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