Following the explosive ‘Uptober’ surge that shook the market, Bitcoin’s [BTC] value has seen a minor decline. Despite this, analysts from Bernstein Research hold a positive outlook, offering an optimistic prediction for the digital currency.
VanEck’s Head of Digital Assets Research, Matthew Sigel, shared key takeaways from the report titled “From Coin to Compute: The Bitcoin Investing Guide” by Bernstein.
The report puts forward an ambitious target of $200,000 for Bitcoin by the upcoming year.
Analysts Gautam Chhugani, Mahika Sapra, and Sanskar Chindalia have identified the crucial factors contributing to their BTC price expectation, mentioning:
“In our assessment, the new era of institutional involvement could propel Bitcoin to a $200,000 peak by the conclusion of 2025.”
It is significant to note that the primary cryptocurrency has surged by approximately 110% in the past year, as stated by CoinMarketCap.
Currently, its market cap stands at $1.3 trillion, constituting more than half of the total global crypto market cap of $2.32 trillion.
Enhanced Growth Driven by Institutional Adoption
Bernstein’s comprehensive 160-page “Black Book” accentuated the substantial role played by institutional investors in Bitcoin’s present and future expansion.
As per the report, ten global asset managers presently hold over $60 billion in BTC through regulated exchange-traded funds (ETFs), marking a significant increase from $12 billion in September 2022.
Moreover, Bitcoin ETFs have recorded one of the most prosperous ETF launches in history by attracting $21 billion in inflows year-to-date.
A recent report by CryptoCrypto highlighted that the leading BTC ETF, IBIT, has outperformed Vanguard’s VTI, securing the third position in YTD flows.
In the wake of this notable institutional interest, Bernstein’s report pointed out:
“We foresee Wall Street replacing Satoshi as the primary Bitcoin wallet holder by the culmination of 2024.”
Eric Balchunas, a senior ETF analyst at Bloomberg, echoed this viewpoint. To provide context, Satoshi Nakamoto, Bitcoin’s creator, is believed to possess around 1.1 million BTC.
The Transforming Landscape of Bitcoin Mining
Alongside institutional adoption, the report sheds light on the mining sector, expected to recuperate post the April 2024 halving event.
It was observed that leading U.S. miners are consolidating their market share and are emerging as crucial energy infrastructure contributors for AI data centers.
Bernstein’s report anticipates that by 2027, over 20% of the U.S. Bitcoin mining capacity could be dedicated to AI, with smaller miners propelling this transition.
Furthermore, revenue from the Bitcoin mining hardware industry is estimated to exceed $20 billion over the upcoming five-year period.
Is the $200,000 Prediction a ‘Modest’ Projection?
Meanwhile, Chhugani, one of the chief analysts of the report, deemed the $200,000 Bitcoin price projection as a “modest estimate,” attributing it to the escalating U.S. debt levels.
With the national debt crossing $35 trillion, Bitcoin’s restricted supply makes it an increasingly appealing store of value.
Previously, prominent investors like Paul Tudor Jones have endorsed Bitcoin as a hedge against inflation.
Considering these factors, the likelihood of Bitcoin attaining $200,000 by 2025 appears increasingly feasible.