Bernstein Predicts Bitcoin to Hit $200,000 by 2025, Driven by Institutional Adoption and ETFs

Bitcoin forecast to hit $200k by end of 2025: Bernstein

The price of Bitcoin BTC $65,902 could go as high as $200,000 by the end of 2025 as the cryptocurrency enters "a new institutional era," according to an Oct. 22 report by Bernstein Research. Bernstein's 160-page "Black Book" makes the case for why Bitcoin miners will continue to consolidate the industry, Matthew Sigel, VanEck's head of digital asset research, said in an Oct. 23 post on the X platform. "Ten global asset managers now own ~$60Bn wrapped as regulated [exchange-traded funds] compared with $12Bn in September 2022," according to the report. "By 2024 end, we expect Wall Street to replace Satoshi as the top Bitcoin wallet," Bernstein said. Bitcoin has dominated the ETF landscape this year, comprising six of the top ten most successful launches in 2024, according to a post on the X platform by Nate Geraci, president of The ETF Store, an investment adviser. Institutional analysts, including Bernstein, JP Morgan, and hedge fund veteran Paul Tudor Jones, are increasingly bullish on BTC ahead of the United States presidential election in November. Investors are turning toward gold and BTC in a "debasement trade" as they brace for a "catastrophic scenario" amid rising geopolitical tensions, JPMorgan said in an Oct. 3 report. "[R]ising geopolitical tensions and the coming [United States] election are likely to reinforce the 'debasement trade' thus favoring both gold and Bitcoin," according to the report, which JPMorgan shared with Cointelegraph. The so-called debasement trade refers to a spike in gold demand caused by factors ranging from "structurally higher geopolitical uncertainty since 2022, to persistent high uncertainty about the longer-term inflation backdrop, to concerns about [...] persistently high government deficits across major economies," JPMorgan said. On Oct. 22., Jones, who founded hedge fund Tudor Investment Corporation, said he is longing Bitcoin and other commodities because "all roads lead to inflation" after the US presidential election. "I probably have some basket of gold, Bitcoin, commodities and Nasdaq [technology stocks] and I would own zero fixed income," Jones said on CNBC's Squawk Box. Meanwhile, Bitcoin miners are poised to recover from a post-halving slump in mid-2024 as the industry consolidates and cashes in on energy demand from artificial intelligence, according to Bernstein. "We expect Riot, ClearSpark and Marathon to consolidate the Bitcoin mining industry," Bernstein said. The Bitcoin network's April "halving" event reduced mining rewards from 6.25 BTC to 3.125 BTC per block. Meanwhile, the demand for AI-powered computational power is surging. Nick Hansen, CEO of mining firm Luxor, reportedly said miners could earn $2 to $3 from AI per kilowatt hour (kwH) of energy expended, compared to $0.15 to $0.20 from BTC mining. Several Bitcoin miners -- including Core Scientific, Hive Digital Technologies (HIVE) and Hut 8 (HUT) -- are embracing AI as a secondary revenue source.

Bitcoin Could Hit $200,000 By 2025, Driven By Institutional Demand and ETFs: Bernstein

Spot Bitcoin ETFs have already attracted $60 billion in assets, signaling increased confidence in cryptocurrency's future. Bitcoin BTC/USD could soar to $200,000 by the end of 2025, driven by a combination of rising institutional demand and supply reduction following the latest halving. What Happened: In their October "Bitcoin Investing Guide," Bernstein analysts highlighted Bitcoin's unique supply structure, particularly its capped total supply of 21 million coins and the halving events that reduce the rate at which new coins are created. These events occur every four years and effectively reduce the selling pressure from miners. "After each halving cycle, the miners' rewards halve, which means half the miner sell pressure in the market," the report noted. A major factor in this cycle is the introduction of spot Bitcoin ETFs, which launched in January 2024. By September 2024, these ETFs had already accumulated $60 billion in assets under management, with Bernstein predicting this number could grow to $190 billion by the end of 2025. Institutional adoption is expected to play a pivotal role in Bitcoin's growth, with these ETFs providing access to traditional capital markets. While 80% of current ETF flows come from retail investors, Bernstein expects institutional participation to rise significantly. According to a recent tweet by CryptoQuant's founder, U.S. institutional ownership of spot Bitcoin ETFs is around 20%, with asset managers collectively holding 193,000 BTC. Also Read: Bitcoin Dips Below $67,000: Watch These Key Support Levels, Says Analyst Why It Matters: Bernstein's model, based on a multiple of the marginal cost of production, suggests Bitcoin could rise to $500,000 by 2029 and potentially $1 million by 2033. For the 2025 target, the report estimates Bitcoin could reach 1.5 times its marginal production cost, leading to a projected price of $200,000 -- about three times its current value. The analysts highlighted the "accumulate phase," during which long-term holders buy up Bitcoin and surviving miners add capacity. Given Bitcoin's status as a relatively new asset class, it has substantial room for growth compared to traditional financial assets. Bernstein predicts that by 2025, Bitcoin ETFs could control 7% of the circulating supply, with this number potentially rising to 15% by 2033, up from the current 4.5% What's Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga's upcoming Future of Digital Assets event on Nov. 19. Read Next: Gary Gensler Wishes 'Happy Sweet Sixteen' To Bitcoin Ahead Of Whitepaper Anniversary -- SEC Chair Says Decentralized Tech Compatible With Securities Law, But... Image: Shutterstock This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs