Bernstein analysts raise bitcoin price target to $200,000 by end of 2025

Analysts at research and brokerage firm Bernstein have raised their price target for bitcoin to $200,000 from $150,000 by the end of 2025.

The target is driven by expectations of unpreceded demand via spot bitcoin exchange-traded funds run by some of the world’s leading asset managers, such as BlackRock, Fidelity and Franklin Templeton, reaching around $190 billion in assets under management compared to $60 billion today, Gautam Chhugani and Mahika Sapra wrote in a note to clients.

“We believe that the U.S regulated ETFs were the watershed moment for crypto that brought in structural demand from traditional pools of capital,” the analysts wrote. “Around $15 billion of net new flows have been brought in by the ETFs combined. We expect Bitcoin BTC -0.44% ETFs to be equivalent to ~7% of bitcoin in circulation by 2025 and ~15% of bitcoin supply by 2033.”

Spot Bitcoin ETF projections. Image: Bernstein .

Bitcoin supply being “constrained” was another factor the analysts noted following bitcoin’s latest halving event in April, when the miners’ block subsidy reward halved from 6.25 BTC to 3.125 BTC. This means that the new supply of bitcoin dropped from an average of 900 BTC per day to 450 per day post-halving.

“We believe Bitcoin is in a new bull cycle,” the analysts said. “The 'halving' presents a unique circumstance, where natural bitcoin sell-pressure from miners declines by half (or even more, as they inventory more in anticipation), while new catalysts for bitcoin demand arise, leading to exponential price moves.”

Looking at previous cycles, bitcoin rallied to a high of approximately 5 times the marginal cost of production in 2017 then bottomed at a low of 0.8 times marginal cost in 2018, the analysts said. In 2021, it rose to around 2.3 times the prevailing marginal cost of production and later bottomed at 0.7 times the marginal cost in 2022, they added, washing out inefficient, unprofitable miners. 

“For the 2024-27 cycle, we expect bitcoin to rally to 1.5 times bitcoin's marginal cost of production, implying a cycle high of $200,000 (2.8x appreciation from today's BTC price) by mid 2025,” Chhugani and Sapra said.

Bitcoin estimated price cycle. Image: Bernstein .

The Bernstein analysts’ base case estimates beyond next year are for bitcoin to reach $500,000 by the end of 2029 and $1 million by 2033.

The largest cryptocurrency by market cap is currently trading at $67,123, according to The Block’s bitcoin price page .

Bernstein initiates coverage on MicroStrategy with an outperform rating

The Bernstein analysts also initiated coverage on business intelligence firm and corporate bitcoin holder MicroStrategy with an outperform rating, targeting a $2,890 price for the stock by the end of 2025 — 80% to the upside.

“Investors own MSTR to gain an active and leveraged equity exposure to bitcoin. Investors are willing to pay a premium, given the scarcity of bitcoin corporate investment vehicles such as MSTR in listed public markets and scalability of its active investing strategy,” the analysts said. “Further, the active leveraged strategy has outperformed bitcoin spot — $NAV per share has grown 4-fold vs. 2.4x growth in bitcoin spot for the last ~4 years since the adoption of a bitcoin strategy.”

Yesterday, MicroStrategy proposed a $500 million convertible senior note offering “to acquire additional bitcoin and for general corporate purposes,” with the option for an additional $75 million.

The firm, which already holds 214,400 BTC — equivalent to 1.1% of circulating supply and valued at over $14 billion — also announced the redemption of $650 million of its 2025 convertible senior notes.

“Our risk analysis on debt suggests low risk for 2025 convertible and moderate risk for 2027/2030 convertible, based on today’s bitcoin price — already in-the-money. 2027/2030 convertible debt would require BTC price above $125K, at 10% premium to MSTR stock,” Chhugani and Sapra added. “We believe MSTR’s long term convertible debt strategy allows it enough time to gain from bitcoin upside, with limited liquidation risk to its bitcoin on balance sheet.”

The Bernstein analysts’ base case estimate is that MicroStrategy will own 1.5% of bitcoin’s supply by the end of 2025.

Gautam Chhugani maintains long positions in various cryptocurrencies.