In a groundbreaking move, Bernstein analysts have significantly increased their price target for bitcoin, projecting it to reach $200,000 by the end of 2025. This bullish forecast is driven by the analysts’ expectations of unprecedented demand for bitcoin through the rise of spot bitcoin exchange-traded funds (ETFs) from leading asset managers.
Spot Bitcoin ETFs to Fuel Demand
Bernstein analysts Gautam Chhugani and Mahika Sapra believe that the emergence of U.S. regulated spot bitcoin ETFs has been a “watershed moment” for the cryptocurrency, attracting significant inflows from traditional pools of capital. They expect these ETFs to reach around $190 billion in assets under management by 2025, compared to the current $60 billion, driving substantial demand for bitcoin.
Halving Event and Constrained Supply
Another key factor behind the analysts’ price target is the recent bitcoin halving event in April 2024, which reduced the miners’ block subsidy reward from 6.25 BTC to 3.125 BTC. This has resulted in a significant drop in the daily new supply of bitcoin, from an average of 900 BTC to just 450 BTC. The analysts believe this constrained supply, coupled with growing demand, will lead to “exponential price moves” for bitcoin.
Historic Price Cycles and Marginal Cost
Examining previous bitcoin price cycles, Bernstein analysts note that the cryptocurrency has historically rallied to around 5 times its marginal cost of production. They expect the 2024-2027 cycle to see bitcoin reach 1.5 times the marginal cost, implying a cycle high of $200,000 by mid-2025, or a 2.8x appreciation from the current price.
Long-Term Outlook: $500,000 by 2029, $1 Million by 2033
The analysts’ base case estimates extend beyond 2025, projecting bitcoin to reach $500,000 by the end of 2029 and a staggering $1 million by 2033.
Initiating Coverage on MicroStrategy
In addition to their bullish bitcoin outlook, the Bernstein analysts have also initiated coverage on business intelligence firm and corporate bitcoin holder MicroStrategy. They have an outperformed rating and a $2,890 price target by the end of 2025—an 80% upside.
The analysts believe that investors are willing to pay a premium for MicroStrategy’s stock, given its active and leveraged exposure to bitcoin, as well as the scarcity of such investment vehicles in the public markets.
Overall, Bernstein’s analysts have painted a highly optimistic picture for the future of bitcoin, with their price targets signaling a significant upside potential for the leading cryptocurrency.
