In an evaluation released Thursday, leading global investment firm AllianceBernstein with assets under management price $725 billion significantly elevated its price goal for Bitcoin, predicting the premier cryptocurrency will reach $1 million by 2033. This bullish outlook is underscored by a recent wave of adoption via US spot Bitcoin exchange-traded funds (ETFs) managed by heavyweight asset managers including BlackRock, Fidelity, and Franklin Templeton.
Bitcoin’s Path To $1 Million In 2033
Analysts Gautam Chhugani and Mahika Sapra from Bernstein outline an in depth scenario where they expect the assets under management in Bitcoin-related ETFs to escalate to about $190 billion by 2025, a considerable leap from the present $60 billion. The report states, “We imagine that the US regulated ETFs were the watershed moment for crypto that brought in structural demand from traditional pools of capital.”
They highlighted the considerable impact of those funds, which have already funneled roughly $15 billion in net recent flows into the market.
Related Reading
The report extrapolates that by 2025, Bitcoin ETFs will represent about 7% of all Bitcoins in circulation, and by 2033, this figure could rise to around 15% of the entire Bitcoin supply. This significant uptick in institutional interest and investment is poised to play a critical role in driving Bitcoin’s price upward.
A critical aspect of Bernstein’s evaluation is the effect of Bitcoin’s supply mechanics, particularly the halving events. Essentially the most recent halving in April cut the block reward for miners from 6.25 BTC to three.125 BTC, effectively halving the each day recent supply from 900 BTC to 450 BTC.
In line with Chhugani and Sapra, “The halving presents a novel circumstance, where natural Bitcoin sell-pressure from miners declines by half (or much more, as they inventory more in anticipation), while recent catalysts for bitcoin demand arise, resulting in exponential price moves.”
Historically, after halving events, BTC has experienced significant price rallies. The analysts draw on past cycles for context: in 2017, Bitcoin surged to roughly five times its marginal cost of production, then bottomed at 0.8 times in the next yr. The same pattern was observed within the 2021 cycle.
Related Reading
For the 2024-27 cycle, they project a more conservative yet substantial increase to 1.5 times Bitcoin’s marginal cost of production, translating to a predicted mid-cycle high of $200,000 by mid-2025. In the next cycle, Bernstein expects the Bitcoin price to succeed in half 1,000,000 US dollars by 2029, before breaking the $1 million mark 4 years later.
Outlook For MicroStrategy
In tandem with their Bitcoin outlook, Bernstein also initiated coverage on MicroStrategy with an outperform rating, targeting a price of $2,890 for the stock by the top of 2025. MicroStrategy has turn into notable for its BTC acquisition strategy, now holding 214,400 BTC, or 1.1% of the cryptocurrency’s circulating supply, valued at roughly $14.5 billion.
MicroStrategy’s aggressive acquisition of Bitcoin, funded through convertible notes—a type of long-term debt that converts into stock under specific conditions—demonstrates a strong investment strategy which the analysts imagine offers “limited liquidation risk” resulting from the already profitable nature of their holdings based on today’s Bitcoin prices. They foresee MicroStrategy’s holdings increasing to 1.5% of the Bitcoin supply by 2025.
At press time, BTC traded at $66,946.
Bitcoin falls below $67,000, 1-day chart | Source: BTCUSD on TradingView.com
Featured image created with DALL·E, chart from TradingView.com