Analysts at Bernstein, a research and brokerage firm, have revised their projections for Bitcoin’s price. They raised the forecast from $150,000 to $200,000 by the end of 2025.
This expectation is based on the growing demand driven by spot Bitcoin exchange-traded funds (ETFs) managed by major financial market players such as BlackRock, Fidelity and Franklin Templeton.
Growth in Demand for Bitcoin ETFs
Analysts Gautam Chhugani and Mahika Sapra highlighted in a note to clients that the introduction of regulated ETFs in the U.S. represents a significant milestone for the crypto market, attracting capital from traditional investors.
He estimates that Bitcoin ETFs will move around $190 billion in assets under management by 2025. This is a significant increase compared to the current US$ 60 billion.
“We believe that regulated ETFs in the U.S. have been a game-changer for the crypto market, bringing a structural demand from traditional equity funds,” the analysts stated. They project that Bitcoin ETFs will account for about 7% of BTC in circulation by 2025 and approximately 15% by 2033.
Halving Impact
Another crucial factor mentioned by analysts is Bitcoin’s halving event, which took place in April. The event halved the miners’ reward from 6.25 BTC to 3.125 BTC per mined block. This reduction in the pace of new Bitcoin creation, from 900 BTC per day to 450 BTC per day, decreases supply and increases buying pressure, potentially driving prices higher.
“We believe Bitcoin is entering a new bull cycle,” the analysts noted. They explained that the reduction in the supply of Bitcoins, combined with new demand catalysts such as ETFs, could lead to exponential price movements.
Looking back at previous cycles, analysts noted that in 2017, Bitcoin peaked at approximately five times the marginal cost of production. Then, in 2021, it rose to about 2.3 times that cost.
However, during bearish periods, the price fell to 0.8 and 0.7 times the marginal cost of production in 2018 and 2022, respectively. These cycles weed out inefficient and unprofitable miners, setting the stage for new highs.
For the 2024-27 cycle, Bernstein analysts predict that Bitcoin could reach 1.5 times the marginal cost of production, implying a price of $200,000 by mid-2025. Furthermore, they project that Bitcoin could reach $500,000 by the end of 2029 and reach $1 million by 2033.
Bitcoin is currently trading in the $67,000 range, as per data from CoinGecko.