- Bernstein predicts Bitcoin’s market cap could quadruple to over $3 trillion by mid-2025, citing strong fundamentals and a range of positive catalysts.
- Key growth drivers for Bitcoin include the upcoming halving event, favorable accounting standards, and the potential approval of a U.S.-listed spot Bitcoin ETF.
Optimistic Forecast for Bitcoin’s Market Position
Bernstein, a prominent brokerage firm, has released a research report offering a highly optimistic outlook for Bitcoin (BTC), projecting substantial growth for the world’s largest cryptocurrency.
Key Drivers of Bitcoin’s Projected Growth
Bernstein analysts, led by Gautam Chhugani, highlight Bitcoin’s robust fundamentals, noting that 70% of the outstanding supply has not been traded in the past year. This all-time high in Bitcoin’s history demonstrates extraordinary churn rates for a financial asset, particularly one known for supply squeeze-driven exponential moves.
The Impact of the Halving Event
The upcoming Bitcoin halving event, expected in April or May 2024, is seen as another significant catalyst. This event will likely reduce the monthly selling pressure from miners to less than $500 million, down from the current $1 billion at Bitcoin‘s price of $37,000. The halving process, which halves the reward miners receive, traditionally impacts Bitcoin’s price positively due to the reduced rate of new Bitcoin entering the market.
Additional Tailwinds for Bitcoin
New guidelines from the Financial Accounting Standards Board (FASB) will allow companies to book mark-to-market gains on Bitcoin inventory. This change is anticipated to encourage corporate entities to hold Bitcoin as a treasury asset, thereby creating new demand sources.
Potential Approval of a Bitcoin ETF
The approval of a U.S.-listed spot Bitcoin ETF is another anticipated tailwind. A Bitcoin ETF would simplify access to Bitcoin for companies and retail investors. Bernstein notes that the U.S. Securities and Exchange Commission (SEC) is engaging with applications from leading asset managers, suggesting an early 2024 approval.
Bitcoin as a Debasing Hedge
In the context of potential economic challenges in early 2024, Bitcoin’s role as a “debasement hedge” against scenarios like debt monetization or economic slowdown may become more pronounced. This aspect adds to Bitcoin‘s appeal as a safe-haven asset during times of financial uncertainty.
Bernstein’s report paints a promising picture for Bitcoin, with several key catalysts poised to drive significant growth by mid-2025. The combination of strong market fundamentals, the halving event, favorable accounting practices, the potential ETF approval, and Bitcoin‘s role as a hedge against economic instability all contribute to a bullish outlook for the cryptocurrency’s future.