Renewed flagship crypto forecast comes as the Bernstein initiates coverage of software developer MicroStrategy (NASDAQ: MSTR) stock, the largest corporate holder of Bitcoin, with an “outperform” rating and a price target of $2,890.
The price of Bitcoin (BTC) is expected to reach $1 million by 2033 and could hit a cycle-high of $200,000 by 2025, according to popular investment firm Bernstein.
“We derive the long-term market premium based on a probability-weighted scenario based on our Bitcoin price model for 2029/2033. Our base case scenario believes Bitcoin would appreciate $200,000 by 2025, $500,000 by 2029, and $1 million by 2033.”
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Demand from Bitcoin ETFs will drive the surge in BTC price
Bernstein analysts Gautam Chhugani and Mahika Sapra attribute this bullish outlook to anticipated unprecedented demand driven by spot Bitcoin exchange-traded funds (ETFs) managed by major asset managers like BlackRock, Fidelity, and Franklin Templeton.
They project that assets under management for these Bitcoin ETFs could grow to around $190 billion, up from the current $60 billion.
“We believe that U.S. regulated ETFs were a watershed moment for crypto, bringing in structural demand from traditional pools of capital,” the analysts noted. They estimate that these ETFs’ combined net new flows have already brought in approximately $15 billion. By 2025, Bitcoin ETFs are expected to hold about 7% of the Bitcoin in circulation, increasing to 15% by 2033.
Impact of Bitcoin halving on BTC price
Another factor supporting Bitcoin’s price surge is its constrained supply, particularly following the latest halving event in April, which reduced miners‘ block rewards from 6.25 BTC to 3.125 BTC. This halving decreased the daily new supply of Bitcoin from 900 BTC to 450 BTC.
“We believe Bitcoin is in a new bull cycle,” the analysts said. “The ‘halving’ reduces the natural sell pressure from miners by half or even more as they hold inventory in anticipation, while new catalysts for Bitcoin demand emerge, leading to exponential price movements.”
Bernstein’s base case estimates maiden crypto at $1 million by 2033 due to demand and supply mechanics that will significantly impact Bitcoin’s price in the coming years, increasing its scarcity and driving valuation.
