Analysts at the renowned firm Bernstein have raised their price target for Bitcoin to $200,000 by the end of 2025. Unprecedented demand driven by leading spot Bitcoin ETFs and the recent halving event are cited as major factors for this surge.
Analysts at the research and brokerage firm Bernstein have raised their price target for Bitcoin from $150,000 to $200,000 by the end of 2025. This optimistic forecast is based on expectations of extraordinary demand through spot Bitcoin ETFs managed by some of the world's leading asset managers such as BlackRock, Fidelity, and Franklin Templeton. These ETFs could reach assets under management of approximately $190 billion, compared to the current $60 billion, as analysts Gautam Chhugani and Mahika Sapra explained in a client note.
Turning Point through Regulated ETFs
"We believe that the US-regulated ETFs were the turning point for cryptocurrencies, bringing structural demand from traditional capital pools", the analysts wrote. The ETFs have collectively generated net inflows of around $15 billion. Chhugani and Sapra expect Bitcoin ETFs to account for about 7% of the circulating Bitcoins by 2025 and about 15% of the Bitcoin supply by 2033.
Impact of the Halving Event
Another significant factor for the price forecast is the restricted Bitcoin supply following the recent halving event in April. During this event, the block subsidy reward for miners was halved from 6.25 BTC to 3.125 BTC, reducing the new Bitcoin supply from an average of 900 BTC per day to 450 BTC per day. "We believe that Bitcoin is in a new bull cycle", the analysts stated. The halving presents a unique situation where the natural selling pressure of Bitcoin by miners is halved or more, while new catalysts for Bitcoin demand emerge, leading to exponential price movements.
Looking at past cycles, Bitcoin reached a peak of about five times the marginal cost of production in 2017 and a low of 0.8 times the marginal cost in 2018. In 2021, Bitcoin rose to about 2.3 times the prevailing marginal cost and reached a low of 0.7 times the marginal cost in 2022, pushing inefficient, unprofitable miners out of the market.
For the 2024-2027 cycle, the analysts expect Bitcoin to rise to 1.5 times the marginal cost, implying a cycle peak of $200,000 by mid-2025. Bernstein analysts' base estimates further predict that the Bitcoin price will rise to $500,000 by the end of 2029 and to $1 million by 2033.
