- Bitcoin is on the cusp of breaking the $70,000 barrier.
- Bernstein analysts predict that the cryptocurrency’s price will hit $200,000 in 2025.
- BlackRock and MicroStrategy will play key roles in realising that prediction.
Bitcoin’s price will hit an all-time high of $200,000 in 2025.
Bernstein analysts made that prediction in a report this week. They argue that growing institutional crypto adoption will help drive the digital asset’s price to a record over the next year.
“We are on the verge of a new cycle,” Gautam Chhugani, Mahika Sapra, and Sanskar Chindalia wrote in the report.
The bullish prediction adds to the crypto industry’s optimism. While Bitcoin is yet to cross the $70,000 barrier in October, it is up almost 60% this year.
Macroeconomic factors like the US election, Beijing’s $284 billion economic stimulus programme, and interest rate cuts have incentivised investors to bet on a rally.
Bitcoin ETFs
For Bernstein, two factors play a particularly big role in the expected rally: Institutional adoption and timing.
Key signs of institutional adoption include the launch of spot Bitcoin exchange-traded funds, MicroStrategy’s use of the cryptocurrency as a treasury asset, and the rollout of new trading services from fintech firms like Robinhood.
Of those, the launch of US-regulated ETFs was a “watershed moment,” Bernstein wrote, noting how it triggered Bitcoin’s breakout to $73,700.
Bitcoin ETFs run by the likes of BlackRock have seen inflows of over $21 billion since launching earlier this year.
Bernstein predicted that the assets under management by Bitcoin ETF issuers will reach about $190 billion by the end of next year, making up about 7% of the Bitcoin in circulation.
The halving
Bernstein also singled out timing as a key factor.
More specifically, 2025 will mark the one-year anniversary of the halving, a quadrennial event that slashes Bitcoin miners’ rewards for maintaining the blockchain by half.
The event matters because previous the four halvings have triggered new growth cycles that peaked in the second year after the event, Bernstein said.
A halving event is usually followed by a year of “irrational market exuberance” before the market starts to contract again in year three, Bernstein said.
Following that logic, the next peak would come at some point in 2025.
Bernstein based its $200,000 price surge on Bitcoin’s marginal cost of production, which it defined as the cost of the least efficient miner on the market.
Their estimates suggest that Bitcoin’s price will be 1.5 times that of today’s marginal cost.
In 2017, Bitcoin’s price ended up being five times that of the marginal cost. In 2021, the price ended up at 2.3 times that of the marginal cost from the beginning of the cycle.
Crypto market movers
- Bitcoin is up 1.3% over the past 24 hours to trade at $67,250.
- Ethereum is down 1.9% to trade at $2,528.
What we’re reading
- Why Cardano founder Charles Hoskinson became crypto’s patron of the weird and wild — DL News
- Why Altcoins May Be the Best Bet if Trump Wins the U.S. Presidential Election — Unchained
- Polymarket vs. mainstream polls — Milk Road
- These $BTC vs. Gold ETF charts are wrong — Milk Road
- Nigeria releases Binance exec from custody after money laundering charges are dropped in surprise decision — DL News
Eric Johansson is DL News’ News Editor. Got a tip? Email at eric@dlnews.com.