After hitting a high of $126,000 last year. Bitcoin (Cryptocurrency: BTC) It experienced a significant decline as investors became concerned about the trajectory of the economy and interest rates, and Bitcoin whales with huge holdings began selling off. However, Bitcoin has shown resilience, especially amid rising geopolitical tensions.
According to Jeff Kendrick, expectations for the 2026 token have faded a bit, but there is still a lot of room for execution. standard charteredHead of Digital Asset Research. Kendrick believes the coin is a buy and could appreciate as much as 55% this year alone.
Bullish on Bitcoin, but not that much
Things can change very quickly in the world of cryptocurrencies. While new factors seem to be influencing cryptocurrencies all the time, cryptocurrencies are harder to value than traditional publicly traded stocks, primarily because they are not backed by companies that generate revenue and free cash flow, at least in the traditional sense.
Kendrick has long been bullish on Bitcoin, but in December he downgraded his outlook for the world’s largest token, cutting his 2026 price target from $300,000 to $150,000 per coin, which would imply an upside of about 55% from current levels (as of January 15). One of the reasons Kendrick lowered his price target is that he is more bearish on digital asset treasury companies, which essentially use the capital markets to borrow money and use it to buy Bitcoin.
Specifically, we believe that purchases by Bitcoin Digital Asset Treasury (DAT) are likely over, as valuations…no longer support Bitcoin DAT’s expansion. We expect a consolidation rather than a sell-off, but DAT buying is unlikely to provide further support.
DAT started with Michael Saylor. strategy (formerly known as MicroStrategy) used its own funds to buy Bitcoin in 2020 and eventually gained enough confidence that it began using the capital markets to raise cash to buy even more Bitcoin. This strategy was very successful and led to a significant increase in the stock price. However, the Bitcoin treasury company’s stock was trading at a huge premium compared to the amount of Bitcoin it actually owns, leaving many analysts questioning its valuation.
Why buy a stock trading at such a high premium to its net asset value when you could just buy Bitcoin itself?Since the middle of last year, Strategy stocks have been in free fall. A drop in valuation could also hamper DAT’s ability to raise funds to purchase Bitcoin.
However, Kendrick still sees room for upside from spot Bitcoin exchange traded funds (ETFs). After all, ETFs make it easier for more institutions to invest in cryptocurrencies and reflect the Trump administration’s pro-crypto stance, especially with the passage of several bills and the issuance of executive orders that alleviate investors’ regulatory concerns.
Many believe that because Bitcoin is a type of digital gold, it protects against inflation and acts as a haven in times of turmoil. Bitcoin has not always traded this way, but it has performed well since the ouster of Venezuelan President Nicolas Maduro and the US Department of Justice’s subpoena to the Federal Reserve. Bitcoin has essentially been tracking the price of gold for the past month.
Will Bitcoin be able to perform well this year?
Although the environment is not as bullish for cryptocurrencies as it was at the beginning of last year, I think Bitcoin can still perform well given geopolitical tensions in the US and the debt crisis not going away anytime soon. Bitcoin is the cryptocurrency I trust the most because it has proven to be resilient to significant declines.
As I mentioned earlier, investors can own Bitcoin, and I think this could be a unique form of diversification in a multi-asset portfolio. Obviously, target prices for a sector as risky as cryptocurrencies are difficult to predict, but by holding Bitcoin for the long term, investors have a better chance of generating good returns.
Bram Berkowitz has a position in Bitcoin. The Motley Fool has a position in and recommends Bitcoin. The Motley Fool recommends Standard Chartered Plc. The Motley Fool has a disclosure policy.
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