Morgan Stanley Suggests Bitcoin Is Entering a Bull Market

New York investment bank Morgan Stanley suggests that bitcoin is slowly entering a bull market.

Bitcoin halving

Morgan Stanley bases its analysis on the fact that the bulk of bitcoin’s rise always occurs after a halving.

As a reminder, halving occurs every four years. It involves halving the number of bitcoins created per block. Miners will soon get 3.125 bitcoins per block, compared with 6.25 bitcoins today.

In the report “Will Crypto Spring Ever Come?”, Morgan Stanley estimates that the next halving should take place in April 2024.

The precise date depends on the evolution of the network’s computing power (hashrate). As halving approaches, miners tend to push inefficient machines to the limit, as they will become unprofitable after halving. The higher the computing power, the faster blocks are found.

An interesting dynamic is playing out in #bitcoin mining right now.

Miners' attempts to outpace each other in upgrading fleets ahead of the halving is leading hashrate to surge, causing even worse conditions for everyone. The game theory of mining never stops to amaze me. pic.twitter.com/LCoIfc5RiO

— Jaran Mellerud 🟧⛏️ (@JMellerud) October 22, 2023

Morgan Stanley also notes that bitcoin’s low point occurs 12 to 14 months after the high. The last high ($68,000) was in November 2021, and the low was actually reached a year later.

For analyst Denny Galindo, “a 50% rise in bitcoin’s price from its low is usually a good sign that the bottom is in the past”.

Put another way, the bull run is well and truly underway, as bitcoin is already up 70% since the start of the year, and 77% from its November low.

The bulk of the rise comes directly after the halving, writes Galindo. This “bullish period begins with halving and ends when the bitcoin price reaches its previous high”.

“The programmed limitation of bitcoin supply can potentially drive the bitcoin price higher,” he added. “There have been three such rises since its inception. Each one lasting 12 to 18 months in the wake of halving”.

All in all, the planets are aligning. ETFs will boost demand, while halving will lower supply. What’s the next ATH? 100 000 $, 200 000 $ ?