In analysis published on Thursday, leading global investment firm AllianceBernstein with $725 billion in assets under management significantly raised its price target for Bitcoin, predicting that the premier cryptocurrency will reach $1 million by 2033. This bullish outlook is underscored by a fresh wave of adoption via the US Bitcoin spot exchange of exchange-traded funds (ETFs) managed by immense asset managers including BlackRock, Fidelity and Franklin Templeton.
Bitcoin’s path to $1 million in 2033
Analysts Gautam Chhugani and Mahika Sapra of Bernstein outline a detailed scenario in which they expect assets under management in Bitcoin-linked ETFs to grow to around $190 billion by 2025, a significant jump from the current $60 billion. The report states: “We believe U.S.-regulated ETFs were a watershed moment for cryptocurrencies, bringing structural demand from traditional capital pools.”
They highlighted the significant impact of these funds, which have already brought about $15 billion of net fresh inflows to the market.
The report extrapolated that by 2025, Bitcoin ETFs will account for approximately 7% of all Bitcoin in circulation, and by 2033 this number could boost to approximately 15% of the total Bitcoin supply. This significant boost in interest and institutional investment could play a key role in increasing Bitcoin’s price.
A critical aspect of Bernstein’s analysis is the impact of Bitcoin’s supply mechanics, particularly halving events. The last halving in April reduced the block reward for miners from 6.25 BTC to 3.125 BTC, effectively halving the daily fresh supply from 900 BTC to 450 BTC.
According to Chhugani and Sapry: “Halfving represents a unique circumstance in which the natural selling pressure of Bitcoin from miners is halved (or even more as they inventory more in anticipation of inventory) while fresh demand catalysts for Bitcoin emerge, which leads to an exponential boost in price moves.”
Historically, BTC has experienced significant price increases following halvings. Analysts draw context from previous cycles: In 2017, Bitcoin’s price rose to about five times the marginal cost of production, then bottomed out at 0.8 times the following year. A similar pattern was observed in the 2021 cycle.
For the 2024–2027 cycle, they forecast a more conservative but significant boost to 1.5 times the marginal cost of production of Bitcoin, which translates to a projected mid-cycle peak of $200,000 by mid-2025. Bernstein expects that in the next cycle Bitcoin’s price will reach half a million US dollars by 2029, and four years later it will cross the $1 million mark.
Prospects for MicroStrategy
In parallel with his Bitcoin outlook, Bernstein also initiated coverage on MicroStrategy with an outperform rating, a share price target of $2,890 by the end of 2025. MicroStrategy has become eminent for its BTC acquisition strategy, currently 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, financed through convertible bonds – a form of long-term debt that converts into equity under certain conditions – shows a solid investment strategy that analysts say offers “limited liquidation risk” due to the already profitable nature of their holdings on today’s basis Bitcoin prices. They predict that MicroStrategy’s share will grow to 1.5% of the Bitcoin supply by 2025.
At the time of publication, the price of BTC was $66,946.
Featured image created with DALL·E, chart from TradingView.com
