Bernstein analysts reiterated their prediction for BTC to grow to $150 000 by 2025

What’s new? Analysts at broker Bernstein expect bitcoin to resume its bullish trajectory after the April 20 halving of the block mining reward and, consequently, the volume of new coins coming into circulation. Experts still stick to their previously announced prediction that the first cryptocurrency will reach the $150 000 mark by 2025.

Material by The Block

Halving is code’s embedded cut in half of the reward to miners for a mined block on the blockchain, which occurs approximately every four years. Initially, miners received 50 BTC; on November 28, 2012, the number dropped to 25 BTC, on July 9, 2016, to 12,5 BTC, and on May 11, 2020, to 6,25 BTC. In April 2024, the award will be cut to 3,125 BTC

What else is known? Analysts first voiced such a prediction even before spot bitcoin exchange-traded funds (ETFs) were approved in the United States. Then, in October last year, they assumed that after the start of trading, 10% of the asset’s circulating supply would be distributed in favor of bitcoin funds.

Then in March this year, they reiterated the $150 000 target, citing growing inflows into BTC ETFs.

In a new report, analysts Gautam Chhugani and Mahika Sapra write that the integration of bitcoin funds with brokerage firms and other players from the traditional finance sector will underpin structural demand for bitcoin.

The flow of funds into BTC ETFs has been choppy in recent weeks and has not shown a clearly positive or negative trend. The previous week was closed negative, but Bernstein expects inflows to rebound after the halving.

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Bernstein emphasized that a reduction in issuance as a result of halving would not in itself lead to higher prices without new demand. Historically, halving has always been followed a few months later by a price spike.

However, in the current cycle, the approval of the BTC ETF on January 10 led to a strong price increase even before the halving: in Q1 alone, BTC rose more than 60% and hit an all-time high above $73 000. At the same time, in the last 10 days, the asset’s rate has corrected by 15% due to the reduction of inflows into spot funds.

Earlier, the head of the largest miner Marathon Fred Thiel doubted the large-scale bitcoin rally after the halving. He believes that this event has already been factored into the price as a result of the high demand for BTC ETFs in the US.

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Bernstein also expects the network hashrate to fall by about 7% after the halving as less efficient companies are forced to shut down operations due to high mining costs. According to analysts, the industry will consolidate in favor of the top four publicly traded mining companies, CleanSpark, Marathon, Riot Platforms, and Cipher Mining.

If the price of bitcoin falls to $40 000 or lower, we should also expect a sharper decline in hashrate, analysts said. However, according to them, the probability of such an unfavorable scenario is not high since the structural demand for ETFs is far from being satisfied. Thus, the total inflow of funds in ten bitcoin funds is $12 billion, while experts predict $80 billion during 2024-2025.

Analysts also believe that over the next 12 months, miners could surpass bitcoin in terms of profitability due to increased market share, high revenues, and growing production capacity.