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Bernstein Research, the esteemed research arm of global asset manager AllianceBernstein, projects that bitcoin will reach $200,000 by the end of 2025. The firm, which manages assets worth $791 billion by August 2024, rates this prediction as ” conservative” in its latest report. 160-page “Black Book” on bitcoin.
Why the price of btc will reach $200,000 in 2025
bernstein x.com/matthew_sigel/status/1849088327107969440″ target=”_blank” rel=”nofollow”>reportTitled “From Currency to Computing: The bitcoin Investment Guide,” it delves into the multifaceted dynamics driving bitcoin's rise. The firm highlights rising institutional adoption, the burgeoning bitcoin exchange-traded fund (ETF) market, and the changing role of bitcoin miners in both the cryptocurrency and artificial intelligence (ai) sectors.
“If you're a bitcoin skeptic…maybe limited supply, the 'store of value' digital asset isn't so bad in a world with US debt hitting new records ($35 trillion now) and inflation threats They still lurk. If you like gold here, you should love bitcoin even more.” x.com/john_at_swan/status/1849099514239475839″ target=”_blank” rel=”nofollow”>writes Gautam Chhugani, Managing Director and Senior Analyst at Bernstein.
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The report highlights a significant shift in institutional investment patterns. According to Bernstein, global asset managers now own approximately $60 billion in bitcoin and ethereum ETFs, five times more than the $12 billion in September 2022. The firm describes the launch of these ETFs as “the most successful in the history of exchange-traded funds.” ”, highlighting $18.5 billion in admissions so far this year since its introduction in January.
“By the end of 2024, we expect Wall Street to replace Satoshi as the leading bitcoin wallet,” the report states. Bernstein attributes this increase to the logistical challenges self-custody poses for retail investors. “With institutional players flocking to bitcoin, ETFs are proving to be the entry point for large-scale investments in digital assets,” the company notes.
Bernstein's bullish stance on bitcoin is supported by his analysis of market trends and institutional behavior. The price of btc has already appreciated 120% in the last 12 months, and its market capitalization has increased to $1.3 trillion.
“With institutional adoption accelerating, we expect bitcoin to triple from its current levels,” Bernstein projects. The firm anticipates that bitcoin's market capitalization could expand to more than $3 trillion by the end of 2025, driven by increased allocations from wealth management platforms, pension funds and registered investment advisors.
The report also suggests that larger financial institutions will play a more dominant role as the market matures. “This new institutional era, in our view, could take bitcoin to a high of $200,000 by the end of 2025,” the analysts write, emphasizing that the forecast is “conservative” given the current trajectory of institutional participation.
bitcoin Treasury and Mining
Another focal point of Bernstein's report is the growing adoption of bitcoin as a corporate treasury asset. The firm highlights MicroStrategy Incorporated (NASDAQ: MSTR) as a pioneering example. Led by CEO Michael Saylor, MicroStrategy has allocated over 99% of its cash holdings to bitcoin and holds approximately 1.3% of the total bitcoin supply.
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“We view MicroStrategy as an active leveraged bitcoin stock strategy,” Bernstein says, noting that the company's shares have delivered superior returns compared to holding bitcoin directly or through ETFs.
Bernstein's report also sheds light on consolidation trends within the bitcoin mining industry. Big players like Riot Platforms (NASDAQ: RIOT), CleanSpark (NASDAQ: CLSK), and Marathon Digital Holdings are acquiring smaller miners, leading to an industry dominated by industrial-scale operations.
“Major US bitcoin miners are consolidating their stake and becoming energy infrastructure players,” the report notes. “We look forward to Riot, CleanSpark and Marathon consolidating the bitcoin mining industry.” Bernstein predicts that these leading miners will control 30% of the total bitcoin hashrate by 2025.
Analysts further explore the synergy between bitcoin mining and ai infrastructure. bitcoin miners are becoming attractive partners for cloud GPU providers, offering gigawatt-scale power access and reducing “time to market” for powering ai data centers.
“Miners present an energy arbitrage opportunity, trading at $2 million to $4 million per megawatt, compared to $30 million to $50 million per megawatt for legacy data centers,” Bernstein observes. Companies like Core Scientific and Iris Energy are taking advantage of this by developing ai data centers alongside bitcoin mining operations.
“bitcoin miners are becoming essential partners for ai data centers, taking advantage of excess energy capacity and offering efficient solutions for high-performance computing,” says Bernstein. This convergence not only diversifies revenue streams for miners but also improves the sustainability and scalability of ai infrastructures.
At the time of publication, btc was trading at $67,162.
Featured image created with DALL.E, chart from TradingView.com
