Berenberg predicts that Bitcoin is set to regain the spotlight in the world of cryptocurrencies.

According to a research report released by Berenberg on Thursday, Bitcoin (BTC) could potentially regain much of the attention it lost to other crypto tokens and projects in recent years and the enthusiasm that waned during the crypto winter, in the coming months.

The report also highlighted that as U.S. regulators continue to clamp down on the cryptocurrency industry, there is a risk that almost every token could be categorized as a security and face enforcement action, with the exception of Bitcoin. This is because the decentralization inherent in Bitcoin's blockchain protocol means that regulators, including the Securities and Exchange Commission (SEC), classify it as a commodity rather than a security, as stated by analyst Mark Palmer.

The bank believes that the recent increase in Bitcoin's price indicates that more investors are recognizing it as a sensible alternative not only within the realm of crypto tokens but also in the context of the global financial system. According to a note by the bank, the recent banking crisis in the US and concerns over the Federal Reserve's interest rate policies have caused some countries to reduce their exposure to the US dollar, thereby fueling concerns about de-dollarization. This development could serve to underscore Bitcoin's value proposition. De-dollarization refers to the weakening of the greenback's dominance as the world's primary reserve currency.

The bank's report also suggests that the fourth Bitcoin halving, set to take place in May 2024, could be another positive catalyst for the cryptocurrency. The report notes that if history is any indication, Bitcoin may rally ahead of and after this much-anticipated halving.

Additionally, the report highlights the increasing traction gained by the Lightning Network, which creates a layer on top of the Bitcoin blockchain and uses user-generated micropayment channels to facilitate transactions more efficiently, thereby highlighting the utility of the Bitcoin blockchain.