Analysts at the renowned research and brokerage firm Bernstein have significantly increased their price target for bitcoin, projecting it to reach $200,000 by the end of 2025. This upward revision from the previous target of $150,000 is driven by anticipated unprecedented demand via spot bitcoin exchange-traded funds (ETFs) managed by leading asset managers such as BlackRock, Fidelity, and Franklin Templeton.
In a note to clients, Bernstein analysts Gautam Chhugani and Mahika Sapra explained that the projected demand could propel the assets under management (AUM) for these ETFs to approximately $190 billion, up from the current $60 billion.
“We believe that the U.S. regulated ETFs were the watershed moment for crypto that brought in structural demand from traditional pools of capital,” the analysts wrote. “Around $15 billion of net new flows have been brought in by the ETFs combined. We expect Bitcoin ETFs to account for ~7% of bitcoin in circulation by 2025 and ~15% of bitcoin supply by 2033.”
Another critical factor noted by the analysts is the constrained supply of bitcoin following the recent halving event in April, where the block reward for miners was reduced from 6.25 BTC to 3.125 BTC. This event halved the new daily supply of bitcoin from 900 BTC to 450 BTC.
“We believe Bitcoin is in a new bull cycle,” the analysts remarked. “The ‘halving’ presents a unique circumstance, where natural bitcoin sell-pressure from miners declines by half (or even more, as they inventory more in anticipation), while new catalysts for bitcoin demand arise, leading to exponential price moves.”
Reflecting on previous market cycles, the analysts highlighted that bitcoin reached approximately five times the marginal cost of production in 2017 and bottomed at 0.8 times the marginal cost in 2018. In 2021, it surged to around 2.3 times the marginal cost of production and later bottomed at 0.7 times the marginal cost in 2022, which led to the washout of inefficient, unprofitable miners.
“For the 2024-27 cycle, we expect bitcoin to rally to 1.5 times bitcoin’s marginal cost of production, implying a cycle high of $200,000 (2.8x appreciation from today’s BTC price) by mid-2025,” Chhugani and Sapra said.