In a analysis Released on Thursday, leading global investment firm AllianceBernstein, with assets under management worth $725 billion, significantly increased its price target for Bitcoin, forecasting the leading cryptocurrency to reach $1 million by 2033. This bullish outlook is underlined by a new wave of adoption through US spot Bitcoin exchange-traded funds (ETFs) managed by heavyweight asset managers including BlackRock, Fidelity and Franklin Templeton.
Bitcoin’s path to $1 million by 2033
Analysts Gautam Chhugani and Mahika Sapra from Bernstein lay out a detailed scenario in which they expect assets under management in Bitcoin-related ETFs to escalate to around $190 billion by 2025, a significant jump from the current $60 billion. The report states: “We believe that US-regulated ETFs represented the inflection point for crypto that brought structural demand from traditional capital pools.”
They highlighted the significant impact of these funds, which have already channeled approximately $15 billion in net new flows to the market.
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The report extrapolates that Bitcoin ETFs will represent around 7% of all Bitcoins in circulation by 2025, and by 2033 this figure could rise to around 15% of the total Bitcoin supply. This significant increase in institutional interest and investment is poised to play a crucial role in driving Bitcoin’s price higher.
A crucial aspect of Bernstein’s analysis is the effect of Bitcoin’s supply mechanisms, especially its halving events. The most recent halving in April reduced the block reward for miners from 6.25 BTC to 3.125 BTC, effectively halving the daily new supply from 900 BTC to 450 BTC.
According to Chhugani and Sapra, “the halving is a unique circumstance, where miners’ natural Bitcoin selling pressure decreases by half (or even more, as they increase their inventory in anticipation) while creating new catalysts for Bitcoin demand, leading to exponential price increases. moves.”
Historically, BTC has seen significant price increases following halving events. The analysts rely on previous cycles for context: In 2017, Bitcoin rose to about five times the marginal cost of production, before bottoming out at 0.8 times the following year. A similar pattern was observed in the 2021 cycle.
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For the 2024-2027 cycle, they predict a more conservative yet substantial increase to 1.5 times Bitcoin’s marginal cost of production, which translates to a predicted mid-cycle high of $200,000 by mid-2025. Expected in the next cycle Bernstein predicts the Bitcoin price will reach half a million dollars in 2029, before crossing the $1 million mark four years later.
Outlook for MicroStrategy
In conjunction with their Bitcoin outlook, Bernstein also initiated coverage of MicroStrategy with an outperform rating, targeting a price of $2,890 for the stock by the end of 2025. MicroStrategy has become notable for its BTC acquisition strategy, which now holds 214,400 BTC , or 1.1%. of the cryptocurrency’s circulating supply, estimated at approximately $14.5 billion.
MicroStrategy’s aggressive takeover of Bitcoin, funded through convertible bonds – a form of long-term debt that converts into equity under specific circumstances – demonstrates a robust investment strategy that the analysts say carries “limited liquidation risk” due to its already profitable nature of their investments. based on current Bitcoin prices. They expect MicroStrategy’s assets to increase to 1.5% of Bitcoin supply by 2025.
At the time of writing, BTC was trading at $66,946.
Featured image created with DALL·E, chart from TradingView.com
