Bitcoin (BTC) could reach a price of $150,000 by 2025, financial advisor Bernstein said in an analyst note on Tuesday.
The price estimate, which would mark a five-fold increase from current levels, was based on the assumption that the U.S. Securities and Exchange Commission (SEC) will start approving spot bitcoin exchange-traded funds (ETFs) in the first quarter of 2024.
Market optimism around potential spot bitcoin ETFs has driven a rally for the world’s largest cryptocurrency by market capitalization. BTC has more than doubled year-to-date to $34,282.40, which is still well below the all-time high of more than $67,000 in November 2021.
“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,” wrote Bernstein analyst Gautam Chhugani, according to details published by CNBC. “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.”
The actual purpose of the Bernstein note was to initiate coverage of several bitcoin miners, which will face turbulence during the bitcoin halving next April, a planned slicing of bitcoin rewards. However, the bitcoin estimate has generated headlines because of the continued optimism around bitcoin ETFs.
Chhugani also predicted that approval of spot bitcoin ETFs, which offer investors exposure to BTC without directly owning the digital asset, would shift as much as 10% of bitcoin’s circulating supply into ETFs.
The only approved product offering similar indirect exposure is the Grayscale Bitcoin Trust (GBTC), which holds about 3% of the bitcoin supply, said Chhugani. The total circulating supply is 19,530,262 bitcoins, according to CoinMarketCap data.
Grayscale wants to convert GBTC to an ETF. The firm’s initial attempts were thwarted by an SEC denial. A federal appeals court said the SEC didn’t appropriately justify that denial and needed to review the application again.
The SEC missed the deadline for appealing that decision last month, sending the price of bitcoin higher. A false social media report that the SEC had approved BlackRock’s ETF application led to a price rally in Bitcoin.
Bernstein isn’t the only firm making strong predictions for bitcoin. Last month, crypto services provider Matrixport predicted that BTC could rise to $56,000 if the SEC approves the bitcoin ETF application from asset management giant BlackRock.