Financial Giant AllianceBernstein Predicts Bitcoin At $1 Million, Here’s When
14 June 2024 - 10:00PM
NEWSBTC
In an analysis released Thursday, leading global investment firm
AllianceBernstein with assets under management worth $725 billion
significantly elevated its price target for Bitcoin, predicting the
premier cryptocurrency will reach $1 million by 2033. This bullish
outlook is underscored by a new 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 a detailed scenario where they
expect the assets under management in Bitcoin-related ETFs to
escalate to about $190 billion by 2025, a substantial leap from the
current $60 billion. The report states, “We believe 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 these funds, which have
already funneled approximately $15 billion in net new flows into
the market. Related Reading: Bitcoin Stuck: Here Are 2 Things That
Must Happen For BTC To Break $72,000 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 total 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
analysis is the effect of Bitcoin’s supply mechanics, particularly
the halving events. The most recent halving in April cut the block
reward for miners from 6.25 BTC to 3.125 BTC, effectively halving
the daily new supply from 900 BTC to 450 BTC. According to Chhugani
and Sapra, “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.”
Historically, after halving events, BTC has experienced significant
price rallies. The analysts draw on past cycles for context: in
2017, Bitcoin surged to approximately five times its marginal cost
of production, then bottomed at 0.8 times in the following year. A
similar pattern was observed in the 2021 cycle. Related Reading:
Bitcoin Price’s Path To $300,000 Cleared By Massive Bullish
Pattern, Says Analyst 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 following cycle, Bernstein
expects the Bitcoin price to reach half a million US dollars by
2029, before breaking the $1 million mark four 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 end of 2025.
MicroStrategy has become notable for its BTC acquisition strategy,
now holding 214,400 BTC, or 1.1% of the cryptocurrency’s
circulating supply, valued at approximately $14.5 billion.
MicroStrategy’s aggressive acquisition of Bitcoin, funded through
convertible notes—a form of long-term debt that converts into stock
under specific conditions—demonstrates a robust investment strategy
which the analysts believe offers “limited liquidation risk” due to
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. Featured image created with DALL·E, chart from
TradingView.com
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