Bernstein analysts predict a significant increase in the value of bitcoin, potentially reaching $150,000 by mid-2025 from its current price of $35,000. This bullish forecast surpasses bitcoin‘s all-time high of $67,000 and is based on the potential approval of a bitcoin exchange-traded fund (ETF) by the Securities and Exchange Commission (SEC) by the first quarter of 2024.
The forecast suggests that SEC approval could divert approximately 10% of the supply of bitcoin in circulation into ETFs. This would give traditional investors direct access to bitcoin, which Bernstein views as a commodity. Currently, Grayscale’s Bitcoin Trust (GBTC), which holds about 3% of all bitcoin, is the only similar investment option available.
Investor optimism remains high despite past SEC opposition to a bitcoin ETF, bolstered by a key court ruling in favor of Grayscale in its lawsuit against the SEC. Further optimism comes from the potential ETF involvement of leading asset managers such as BlackRock (NYSE:BLK) and Fidelity.
Bernstein also initiated coverage on several bitcoin mining companies, predicting that the “halving” event in April 2024 will eliminate less efficient miners and increase profits for the rest. The analysts favor Riot Platforms (NASDAQ:RIOT) and CleanSpark (NASDAQ:CLSK), market share consolidators with Outperform ratings, due to their counter-cyclical investment strategies and continued investment in bitcoin self-mining capacity. Conversely, Marathon Digital (NASDAQ:MARA), despite being the largest miner, received a Market Perform rating with an $8.30 price target due to its higher production costs and reliance on hosting partners.
However, this bullish scenario faces potential obstacles, including continued criticism from SEC Chairman Gary Gensler, recent legal complications such as the Binance lawsuit and the fraud trial of former FTX CEO Sam Bankman-Fried, along with FTX’s bankruptcy.
Despite these challenges, Bernstein’s forecast underscores the potential for significant growth in the value of bitcoin, depending on regulatory developments and the evolving landscape of cryptocurrency mining.
