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Lisa Cantin
Lisa Cantin

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Bernstein Analysts Forecast Bitcoin to Reach $200,000 by 2025 Driven

Analysts at Bernstein Research have significantly revised their Bitcoin price forecast, projecting the cryptocurrency could reach nearly $200,000 by the end of 2025. This bullish outlook is driven by the strong inflows into U.S. spot Bitcoin exchange-traded funds (ETFs) since their approval in January 2024.

Bernstein analysts Gautam Chhugani and Mahika Sapra believe that spot Bitcoin ETFs are on the cusp of gaining approval at major wirehouses and large private bank platforms in the third and fourth quarters of 2024. This is expected to drive significant institutional adoption and investment in Bitcoin.

The analysts estimate that spot Bitcoin ETFs could represent around 7% of the total circulating Bitcoin supply by the end of 2025. Previously, Bernstein had projected a Bitcoin price target of $150,000, but they have now revised this upward to nearly $200,000 by the end of 2025.

Bernstein believes that the institutional "basis trade" in Bitcoin ETFs is acting as a "Trojan Horse" for broader adoption, as these investors evaluate taking "net long" positions in Bitcoin. Currently, around 80% of spot Bitcoin ETF inflows are coming from self-directed retail investors, but the analysts expect institutional integrations with wirehouses to accelerate in the coming quarters.

The analysts estimate that the combined Bitcoin ETFs have already attracted around $15 billion in net new flows. They project that Bitcoin ETFs will account for approximately 15% of the total Bitcoin supply by 2033, with assets under management (AUM) reaching $3 trillion.

Bernstein also suggests that Bitcoin has entered a new bull market cycle, driven by the recent Bitcoin halving event and the emergence of new demand catalysts. The analysts believe that the natural decline in Bitcoin sell pressure from miners, coupled with increased demand, will lead to "exponential price moves" for the cryptocurrency.

In addition to the impact of Bitcoin ETFs, Bernstein highlights the growing adoption of Bitcoin as a treasury reserve asset by corporations. The analysts note that recent FASB guidelines have made it easier for companies to hold Bitcoin on their balance sheets, with MicroStrategy and Bitcoin miners leading the demand today.

Bernstein's revised price target of $200,000 for Bitcoin by the end of 2025 represents a significant upward revision from their previous forecast. The analysts believe that the combination of spot Bitcoin ETF inflows, institutional adoption, and corporate treasury demand will drive the cryptocurrency to new highs in the coming years.

It's important to note that while Bernstein's analysis provides a compelling case for Bitcoin's potential price appreciation, the cryptocurrency market remains highly volatile and subject to various risks and uncertainties. Investors should conduct their own due diligence and consult with financial advisors before making any investment decisions.

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