A prominent investment research firm, Bernstein, has unveiled its bullish outlook for Bitcoin (BTC), forecasting a substantial price surge to $150,000 within the next two years. The primary driver behind this optimistic projection, as indicated by CNBC reports, is the growing enthusiasm surrounding the potential approval of a spot Bitcoin exchange-traded fund (ETF).
Bernstein’s analyst, Gautam Chhugani, articulated this encouraging perspective in a recent research note. According to Chhugani, the anticipated surge in BTC’s value is intricately linked to the prospects of a spot Bitcoin ETF being approved by the United States Securities and Exchange Commission (SEC) by the first quarter of 2024.
The landscape is currently dotted with applications from eight to ten traditional financial heavyweights, including industry titans like BlackRock, Cathie Wood’s Ark Invest, VanEck, Galaxy Digital, WisdomTree, and Fidelity Investments, all of whom are seeking the SEC’s approval for their respective Bitcoin ETF proposals.
Should the SEC give the green light to these ETFs, Bernstein foresees a scenario in which approximately 10% of Bitcoin’s circulating supply would be channeled into these exchange-traded products. It’s worth noting that Grayscale’s Bitcoin Trust already holds about 3% of the total available supply of the leading digital asset.
Gautam Chhugani encapsulated the sentiment by stating, “You may not like Bitcoin as much as we do, but a dispassionate view of Bitcoin as a commodity suggests a turn of the cycle. A good idea is only as good as its timing – SEC approved ETFs by world’s top asset managers (BlackRock, Fidelity et al), seems imminent,”
In addition to the potential impact of Bitcoin ETF approval, Bernstein’s analysis factors in the forthcoming Bitcoin halving event, scheduled for April 2024. This event is expected to lead to a significant reshaping of the Bitcoin mining landscape.
During a Bitcoin halving event, the rewards for miners per block are reduced by 50%. This mechanism is scheduled to occur every four years with the aim of curbing the daily production of BTC. Consequently, this reduction in supply is expected to exert upward pressure on the crypto asset’s value, in line with basic economic principles of supply and demand.
Looking ahead to 2025, Bitcoin’s estimated price of $150,000 represents a fivefold increase from its current value of over $35,000 and more than twice its previous all-time high of $69,000 recorded in November 2021. As the cryptocurrency industry continues to evolve, various factors, including regulatory changes, the approval of spot Bitcoin ETFs, and broader economic developments, are poised to influence Bitcoin’s future trajectory.
While these projections are subject to a variety of factors and uncertainties, they reflect the growing optimism within the financial community regarding the potential future growth of Bitcoin as a valuable asset class.