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Finance titan Bernstein predicts Bitcoin will hit $1 million – here’s when
In a analyses released on Thursday, leading global investment firm AllianceBernstein with $725 billion worth of assets under management significantly increased its price target for Bitcoin, predicting the leading cryptocurrency will reach $1 million by 2033. This bullish outlook is underlined by a new wave of adoption via Bitcoin spot trading in the U.S. -traded funds (ETFs) run by heavyweight asset managers including BlackRock, Fidelity and Franklin Templeton.
Bitcoin’s path to $1 million in 2033
Analysts Gautam Chhugani and Mahika Sapra of Bernstein outline a detailed scenario in which they expect assets under management in Bitcoin ETFs to rise to around $190 billion by 2025, a substantial jump from the current $60 billion. The report states: “We believe that US-regulated ETFs were the watershed moment for cryptocurrencies, driving structural demand from traditional capital pools.”
They highlighted the significant impact of these funds, which have already channeled approximately $15 billion net new flows into the market.
The report extrapolates that by 2025 Bitcoin ETFs will represent approximately 7% of all Bitcoin in circulation and by 2033 this figure could rise to approximately 15% of the total Bitcoin supply. This significant increase institutional interest and investments are poised to play a vital role in driving the price of Bitcoin higher.
A critical aspect of Bernstein’s analysis is the effect of Bitcoin’s supply mechanisms, particularly halving events. The latest halving in April reduced the block reward for miners from 6.25 BTC to 3.125 BTC, effectively halving the new daily supply from 900 BTC to 450 BTC.
According to Chhugani and Sapra, “The halving presents a unique circumstance, where the natural selling pressure of Bitcoin from miners decreases by half (or even more, as they invent more in anticipation), while new catalysts for Bitcoin demand emerge, leading to exponential movements of the prices.
Historically, following halving events, BTC has seen significant price increases. Analysts draw on past cycles for context: In 2017, Bitcoin rose to about five times its marginal cost of production, then bottomed out at 0.8 times the following year. A similar pattern was observed in the 2021 cycle.
For the 2024-27 cycle, they predict a more conservative but substantial increase to 1.5x Bitcoin’s marginal cost of production, translating into a projected mid-cycle high of $200,000 by mid-2025. In the next cycle, Bernstein predicts that the price of Bitcoin will reach half a million dollars by 2029, before crossing the million-dollar mark four years later.
Outlook for MicroStrategy
Along with their outlook on Bitcoin, Bernstein also initiated coverage on MicroStrategy with an outperform rating, targeting a $2,890 price for the stock by the end of 2025. MicroStrategy has become known for its BTC acquisition strategywhich now holds 214,400 BTC, or 1.1% of the cryptocurrency’s circulating supply, worth approximately $14.5 billion.
MicroStrategy’s aggressive acquisition of Bitcoin, financed through convertible notes, a form of long-term debt that converts into equity under specific terms, demonstrates a solid investment strategy that analysts say offers “liquidation risk limited” due to the already profitable nature of their holdings. based on today’s Bitcoin prices. They expect MicroStrategy’s holdings to increase to 1.5% of Bitcoin’s supply by 2025.
At the time of writing, BTC was trading at $66,946.
Featured image created with DALL·E, chart from TradingView.com