Markets
3 reasons why Bitcoin can still reach $150,000 by 2025: Bernstein
- Bitcoin will still reach $150,000 by 2025, Bernstein reiterated in a new note.
- Demand for ETFs and spot Bitcoin remained strong, the analysts wrote.
- The mining sector has yet to experience any major turbulence since the bitcoin halving in April.
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Bitcoin has found its feet and is once again on track to reach $150,000 by next year, Bernstein reiterated in a Monday note.
The company’s lead analyst, Gautam Chhugani, has been forecasting for months that the apex token will hit this price target, and explained that bitcoin’s recent fall to as low as $57,000 did not signal a permanent contraction.
“Investors are asking us if anything has changed from our view of the Bitcoin price at $150,000 and if the price correction after the halving has affected our conviction. If anything, we feel even better about our Bitcoin call,” he and analyst Mahika Sapra wrote.
This represents an increase of 137% from current levels.
First of all, inflows into Bitcoin spot ETFs continuedand have already accounted for half of the volumes Bernstein expected for all of 2024 – although they have been around for less than four months.
“The Bitcoin ETF launch was the most successful ETF launch ever, and we expect continued ETF-driven demand for the remainder of the year, driven by a growing asset allocation to Bitcoin from the share of private banks, wealth managers, pension funds and sovereign wealth funds Overall, between 2024 and 2025, we expect around $70 billion in new capital flows,” the note said. Since their creation, approximately $12 billion has been invested in these funds.
Last week, investors may have worried that this trend was reversing, as funds suffered 8 days of capital outflows. However, not only did that end, but even the Grayscale Bitcoin Trust recorded its first day of inflows, ending one of the lasting headwinds for the ETF market.
Second, Updates to Financial Accounting Standards Board rules regarding crypto spark corporate interest in bitcoin, Bernstein said. For example, Block announced the monthly purchase of the token, although it already owns around $840 million worth of bitcoins.
Bernstein also noted strong demand for direct spot bitcoin purchases, which helped offset recent ETF outflows.
Third, April’s Bitcoin Halving Has Yet to Put a Strain on Cryptocurrency Mining Activity. During this four-year event, the number of tokens awarded to successful miners is reduced, in order to reduce the supply of Bitcoin.
Although the situation is expected to make mining more competitive, the amount of computing resources required for mining has not increased significantly at this time.
Meanwhile, mining equipment prices remain at moderate levels, even as the value of bitcoin has increased. This gives the sector higher profitability capacity and keeps the current players dominant in the space.
“Overall, healthy demand for Bitcoin and continued discipline in the Bitcoin mining cycle, allowing the Bitcoin party to last longer this time. $150,000 in 2025, is very much on the table,” Chhugani wrote.
Bernstein is not alone in maintaining his bullish call. Last week, Standard Chartered announced that bitcoin would still reach $150,000 this year, although not before correcting to $50,000.