Bitcoin (BTC) Price to Hit $1 Million by 2033 and $200,000 by 2025: Bernstein Analysts

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As an experienced financial analyst with a background in traditional markets and a growing interest in the digital asset space, I find Bernstein’s latest Bitcoin price predictions intriguing. Based on the firm’s comprehensive analysis of current market dynamics and historical trends, their optimistic short-term target of $200,000 by mid-2025 seems plausible given the recent surge in institutional demand and the impact of spot Bitcoin ETFs.

According to a major financial institution on Wall Street, Bernstein, they predict that the value of Bitcoin could soar to $1 million by the year 2033. Additionally, they anticipate that it may surpass the $200,000 mark before the end of the next year.

In their latest analysis on MicroStrategy, a business intelligence company listed on Nasdaq and currently holding the largest known stash of Bitcoin with approximately 214,400 coins valued over $14 billion, Bernstein raised their predicted price for one Bitcoin from $150,000 to $200,000 by the end of 2025.

Due to unprecedented interest, the demand for Bitcoin spot exchange-traded funds (ETFs) has led to significant growth. By the end of May, BlackRock’s iShares Bitcoin Trust (IBIT) had accumulated over $20 billion in assets, making it the largest Bitcoin fund globally.

In a message to our valued clients, Bernstein’s research team expressed their conviction that the introduction of spot Bitcoin Exchange-Traded Funds (ETFs) marked a pivotal turning point for cryptocurrency. This development is believed to have attracted institutional investors from traditional financial sectors, leading to an influx of sustained demand for Bitcoin.

Approximately $15 billion in new investments have poured into ETFs collectively. By 2025, we anticipate Bitcoin ETFs to represent around 7% of the total circulating Bitcoins. In contrast, by 2033, we estimate they will account for roughly 15% of the entire Bitcoin supply.

The Bitcoin halving event in April of this year was another factor behind the analysts’ price prediction, as new BTC supply entering the market was halved then, meaning growing demand should have a stronger effect. On top of that, the analysts wrote the halving saw “natural bitcoin sell-pressure from miners” get cut in half,” while “ new catalysts for bitcoin demand arise, leading to exponential price moves.”

In past bitcoin market cycles, analysts noted that the cryptocurrency’s price typically rose to around fivefold its production cost before undergoing a substantial correction. For example, during the 2017 cycle, the price peaked at nearly five times the marginal cost of production, only to decline to roughly 0.8 times that cost in 2018. A comparable trend unfolded in 2021, with Bitcoin reaching a high of approximately 2.3 times its production cost and subsequently dropping to 0.7 times that cost in 2022 (as per The Block’s report), presumably eliminating less productive miners from the market.

According to Bernstein’s historical analysis, Bitcoin is expected to experience significant growth and potentially reach prices 1.5 times greater than its production cost by around mid 2025. This prediction equates to a Bitcoin price of approximately $200,000.

As a financial analyst, I’d interpret Bernstein’s predictions in a more cautious light beyond the initial surge. Their projections indicate that Bitcoin’s price might touch $500,000 by the close of 2029, followed by an upward trend to surpass $1 million around 2033.

At present, Bitcoin is priced at $67,200 following a weekly sell-off that caused it to drop by more than 5%. However, over the previous year, its value had risen an impressive 167%.

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2024-06-15 03:40