Key Points
- Bernstein analysts increase bitcoin’s price target to $200,000 by the end of 2025.
- The firm also initiated coverage on MicroStrategy with an outperform rating.
Analysts from Bernstein, a research and brokerage firm, have revised their price target for bitcoin to $200,000, up from $150,000, by 2025.
Driving Factors
The new target is based on anticipated unparalleled demand from spot bitcoin exchange-traded funds (ETFs) overseen by global leading asset managers like BlackRock, Fidelity, and Franklin Templeton.
These ETFs are expected to reach around $190 billion in assets under management, a significant increase from the current $60 billion, according to Gautam Chhugani and Mahika Sapra.
The analysts noted that the introduction of U.S. regulated ETFs was a critical moment for crypto, attracting traditional capital.
They estimate that by 2025, Bitcoin ETFs will represent about 7% of the circulating bitcoin and about 15% of the bitcoin supply by 2033.
Bitcoin Supply and Demand
The analysts also pointed out that the supply of bitcoin is “constrained” following the recent halving event in April, which reduced the miners’ block reward from 6.25 BTC to 3.125 BTC.
This halving resulted in the new supply of bitcoin falling from an average of 900 BTC per day to 450 per day.
The analysts believe that this ‘halving’ event, combined with new catalysts for bitcoin demand, could lead to significant price movements.
They predict that for the 2024-27 cycle, bitcoin could rally to 1.5 times its marginal cost of production, implying a cycle high of $200,000 by mid-2025.
MicroStrategy Coverage
In addition to their bitcoin analysis, the Bernstein analysts also began coverage on business intelligence firm and corporate bitcoin holder MicroStrategy, giving it an outperform rating.
They set a price target of $2,890 for the stock by the end of 2025, which represents an 80% upside.
MicroStrategy recently proposed a $500 million convertible senior note offering to acquire additional bitcoin and for general corporate purposes.
The company, which already holds 214,400 BTC, also announced the redemption of $650 million of its 2025 convertible senior notes.
The analysts forecast that MicroStrategy will own 1.5% of bitcoin’s supply by the end of 2025.