Bernstein, a leading asset manager with a crypto unit, predicts that Bitcoin (BTC) will hit $150,000 by 2025, driven by factors such as the upcoming halving and potential spot ETF approvals.
Bernstein’s analysts have based their projection on the Bitcoin 4-year cycle theory, suggesting that the cryptocurrency’s price follows a pattern related to its issuance schedule. The halving, expected in April, will reduce BTC issuance from 6.25 to 3.125 per block, potentially leading to a new price breakout and the initiation of a fresh price cycle.
The report emphasizes Bitcoin’s marginal production cost as a crucial factor. This cost represents the minimum expense for the least efficient miner to produce BTC. Historically, Bitcoin has topped prices significantly higher than its marginal production cost, with expectations for the mid-2025 peak to be 1.5x the production cost, translating to $150,000 per coin.
Bitcoin’s Supply and Demand Dynamics
As the sell pressure decreases during the halving, new demand catalysts are anticipated, contributing to a potential surge in BTC demand. Bernstein anticipates that U.S. approval of a BTC spot ETF by early January could further fuel demand for Bitcoin. The analysts project that by 2028, over 9% of circulating spot BTC will be held within ETFs, surpassing miner supply by 6-7 times at its peak.
While some analysts speculate that the combination of the halving and ETF approval may negatively impact mining companies, Bernstein dismisses these concerns. The report suggests that a new BTC price cycle will boost miner revenues, countering potential negative effects on mining companies.
Bernstein expresses high conviction in a new cycle reaching $150,000, highlighting the interplay of miner supply/cost curves as a driving force behind this projection.