Major Wall Street firm Bernstein has revealed it believes the price of the flagship cryptocurrency Bitcoin ($BTC) could reach $1 million by 2033 and top the $200,000 mark by the end of next year.

In a recent report initiating the coverage of Nasdaq-listed business intelligence firm MicroStrategy, the largest corporate holder of the flagship cryptocurrency with 214,400 BTC worth over $14 billion on its balance sheet, Bernstein revised its BTC price target from $150,000 to $200,000 at the end of 2025.

The revision comes over the unprecedented demand seen for spot Bitcoin exchange-traded funds (ETFs), which have seen BlackRock’s iShares Bitcoin Trust (IBIT) amass over $20 billion in total assets to become the world’s largest Bitcoin fund by the end of May.

In a note to clients, Bernstein analysts wrote that they believe that spot Bitcoin ETFs were “the watershed moment for crypto that brought in structural demand from traditional pools of capital,” and added:

Around $15 billion of net new flows have been brought in by the ETFs combined. We expect Bitcoin ETFs to be equivalent to ~7% of bitcoin in circulation by 2025 and ~15% of bitcoin supply by 2033.

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.”

The analysts observed that in previous cycles, Bitcoin surged to roughly five times its estimated marginal cost of production before experiencing a significant decline. For instance, in 2017, the price reached a high of approximately five times the marginal cost of production, followed by a drop to 0.8 times that cost in 2018. A similar pattern emerged in 2021, with a peak at around 2.3 times the marginal cost, followed by a decline to 0.7 times in 2022, which the report suggests weeded out less efficient miners according to The Block.

Based on this historical analysis, Bernstein predicts a rally for Bitcoin in the coming years to 1.5 times its marginal cost of production, which implies a $200,000 price tag by mid 2025.

Beyond the initial upswing, Bernstein’s analysts offer a more conservative long-term outlook, with their estimates suggesting Bitcoin’s price could reach $500,000 by the end of 2029 and a further climb to $1 million by 2033.

Bitcoin is at the time of writing trading at $67,200 after losing over 5% of its value amid a sell-off over the past week. The cryptocurrency rose 167% in the last 12-month period.

Featured image via Pexels.

Source link

By admin

Leave a Reply

Your email address will not be published. Required fields are marked *

Translate »