Cryptocurrency analysts at Bernstein Research believe that spot Bitcoin exchange-traded funds (ETFs) are on the verge of approval at major wirehouses and large private bank platforms, indicating a significant milestone for institutional adoption. The firm has also reiterated its $200,000 Bitcoin price target by the end of 2025.
The Institutional Basis Trade: A “Trojan Horse” for Adoption
Bernstein analysts Gautam Chhugani and Mahika Sapra argue that the institutional “basis trade” — a strategy that involves arbitraging the difference between spot and futures prices — is a “Trojan horse” for broader Bitcoin adoption. While bears may dismiss the spot Bitcoin ETF trade as being driven primarily by retail investors, analysts believe that institutional investors are now evaluating “net long” positions as they become more comfortable with the improving liquidity in these ETFs.
Factors Driving Institutional Adoption
The Bernstein team highlights several key factors that are driving increased institutional adoption of Bitcoin, including:
- Spot Bitcoin ETFs Approval at Major Platforms: The analysts expect spot Bitcoin ETFs to be approved at major wirehouses and private bank platforms in Q3 or Q4 of this year, echoing recent views from industry experts.
- Increased Adoption as Treasury Reserve Asset: New FASB guidelines are making it easier for corporations to hold Bitcoin on their balance sheets, with MicroStrategy and Bitcoin miners leading the demand today.
- Substantial Allocation Headroom: Financial advisors are gradually allocating a portion of their portfolios (0.1-0.3%) to Bitcoin ETFs, and the analysts expect larger advisors to approve these ETFs, driving further growth.
Bullish Bitcoin Price Targets
Bernstein has raised its price target for Bitcoin to $200,000 by the end of 2025, up from the previous $150,000 target. The analysts believe that Bitcoin’s current $60,000 range is equivalent to prices under $10,000 in June 2020, at the same interval after the Bitcoin halving. They expect Bitcoin to reach $500,000 by the end of 2029 and $1 million by 2033.
Conclusion
The Bernstein analysts’ bullish outlook on the impending approval of spot Bitcoin ETFs at major financial institutions and their revised price targets suggests that the cryptocurrency industry is poised for significant growth and institutional adoption in the coming years.
