Bernstein, a well-known research and brokerage firm, has released its predictions for Bitcoin’s price in 2025 following the recent market crash. The firm maintains its target of $200,000 for Bitcoin by the end of 2025.
While some argue that spot Bitcoin ETF trading has reached its peak, Bernstein analysts believe that two important factors are being overlooked. Critics of Bitcoin ETF trading typically focus on early allocations driven by individual investors, with institutional participation limited to underlying “cash and carry” trading instead of net long positions.
According to Gautam Chhugani and Mahika Sapra, Bernstein analysts argue that institutional basis trading is actually a “Trojan horse” for adoption. These investors are now considering “net long” positions as they become more comfortable with the increased liquidity of ETFs:
“We believe that the ‘basis trade’ is primarily driven by hedge funds, which account for 36% of institutional allocation. However, based on our conversations with investors involved in Bitcoin ETFs, we can confidently say that the next step after the basis trade is to consider ‘long’ positions.”
Furthermore, the distribution of financial advisors reflects real demand. Disclosures show that most small-to-midcap advisors allocate 0.1-0.3% of their portfolios to Bitcoin ETFs. Analysts believe that larger advisors endorsing ETFs and the significant allocation headroom in existing portfolios will drive further growth.
Another contributing factor to Bernstein’s prediction is the increasing adoption of Bitcoin as a treasury reserve asset. New guidelines have made it easier for companies to include Bitcoin on their balance sheets by considering market gains rather than just impairment losses. Analysts commented:
“We anticipate a surge in demand from corporate treasuries in 2024, with MicroStrategy and BTC miners leading the way. Recently, Block announced that it will use Bitcoin-related gross profits to purchase BTC monthly for the next 12 months.”
Despite current net outflows from U.S. spot Bitcoin ETFs, totaling $714.4 million over a four-day streak, with an additional $154.4 million leaving the funds on Tuesday, Bernstein analysts expect net inflows to pick up again. They stated, “We anticipate Bitcoin ETF inflows to accelerate again in Q3/Q4, with the current volatile markets providing new inflow levels before the next wave of institutional demand begins.”
Last week, Chhugani and Sapra raised their price targets for Bitcoin from $150,000 to $200,000 by the end of 2025. Ultimately, analysts aim for Bitcoin to reach $500,000 by the end of 2029 and $1 million by 2033.
Reiterating these targets to clients, Bernstein analysts emphasized that Bitcoin in the current range of $60,000 is equivalent to prices below $10,000 in June 2020, when Bitcoin was in the same range after the halving.
*This article is for informational purposes only and does not constitute investment advice.
