According to a recent report from Bernstein, a global investment research and asset management firm, Bitcoin (BTC) is expected to soar to $200,000 by the end of 2025. This optimistic forecast is driven by increasing institutional adoption and a favorable macroeconomic environment for cryptocurrencies.
Bernstein analysts emphasize that the growing involvement of institutional investors is a significant catalyst for Bitcoin’s price surge. The launch of U.S.-regulated Bitcoin exchange-traded funds (ETFs) has been particularly impactful.
The report notes that “ten global asset managers now hold $60 billion of Bitcoin through regulated ETFs, up from just $12 billion in September 2022.”
The analysts state, “We are on the verge of a new cycle,” indicating a shift in market momentum that could propel Bitcoin’s price significantly higher. They predict that by the end of 2024, Wall Street could surpass individual holders like Satoshi Nakamoto as the largest Bitcoin wallet.
Bernstein opine that several macroeconomic factors contributing to Bitcoin’s bullish outlook include, “The upcoming U.S. presidential election, China’s substantial $284 billion economic stimulus, and the anticipated interest rate cuts in the U.S., which could enhance investor confidence in risk assets like Bitcoin.
The report describes the launch of regulated Bitcoin ETFs as a “watershed moment” for the cryptocurrency market. Earlier this year, these products helped drive Bitcoin’s price to a peak of $73,700. Bernstein predicts that total assets under management by Bitcoin ETF issuers could reach approximately $190 billion by the end of 2025, representing about 7% of all Bitcoin in circulation.
Another crucial factor in Bernstein’s forecast is the upcoming Bitcoin halving, an event that occurs approximately every four years and reduces miners’ rewards by half. Historically, halvings have triggered significant price increases in the subsequent years.
The analysts note that previous halvings have led to periods of “irrational market exuberance” followed by corrections. They anticipate that the next peak for Bitcoin prices will occur in 2025, following the halving event.
Bernstein’s projection is also grounded in an analysis of Bitcoin’s marginal cost of production—the expense incurred by the least efficient miner. The report explains, “For this upcoming cycle, they expect Bitcoin’s price to be around 1.5 times today’s marginal cost.”
Currently, Bitcoin is trading at approximately $67,250, having gained nearly 60% in value this year alone. Despite some volatility in the short term, Bernstein remains optimistic about the long-term outlook for Bitcoin driven by institutional investment and macroeconomic factors.