Bitcoin (BTC) To Hit $200,000 And Then $1 Million, Bernstein Predicts

Bernstein analysts Gautam Chhugani and Mahika Sapra recently revised their price targets for Bitcoin in their latest market report

Bernstein analysts Gautam Chhugani and Mahika Sapra recently revised their price targets for Bitcoin in their latest market report, which also initiated coverage on MicroStrategy.

According to the report, the analysts raised their price target for BTC to $200,000 by 2025, and they believe the flagship crypto could reach $1 million by 2033. Bernstein had previously predicted that Bitcoin would reach $150,000 by 2025.

The analysts cited several factors that they believe could contribute to BTC’s exponential price surge, including the institutional demand for the crypto asset.

"We expect strong institutional demand for BTC to continue and predict that Bitcoin under management could reach $190 billion by 2025, up from the $60 billion in BTC that funds have under management today," the report stated.

In their view, the supply and demand dynamics will come into play, considering that the Bitcoin in circulation is bound to decrease drastically as these Spot Bitcoin ETFs continue to accumulate a significant amount of the crypto token for their respective ETFs.

Additionally, two Bitcoin halvings are set to occur before 2033, which will further reduce miners’ supply and support their base case of BTC hitting $1 million.

"We believe Bitcoin supply will decrease materially over the next 13 years, and taking into account the halvings and institutional demand, we arrive at our bull case price target of $1 million by 2033," the analysts wrote.

In their analysis, the Bernstein analysts also highlighted MicroStrategy's role in the crypto space and its strategy to become the "world's largest Bitcoin company."

"We are initiating coverage on MicroStrategy (NASDAQ:MSTR) with an Outperform rating, and a price target of $2,890," the report noted.

The analysts assigned a multiple of 2.5x to MicroStrategy's BTC holdings, arriving at a price target of $2,890. At the time of writing, MicroStrategy's stock is valued at around $1,500.

"We believe MSTR's stock can rise to $2,890, driven by its BTC exposure," the report added.

The research firm noted that MicroStrategy has already shifted its focus from software to Bitcoin, and its stock performance reflects this pivot.

"Since August 2020, when MicroStrategy began accumulating BTC, the company has transformed from a small software company to the largest BTC holding company," the report stated.

According to the analysts, MicroStrategy's strategy has paid off so far, considering that the company now owns 1.1% of Bitcoin's total supply, with holdings worth around $14.5 billion.

"We expect MicroStrategy to increase its BTC holdings, as the company recently announced plans to offer $500 million of Convertible Senior Notes," the report noted.

Some of the proceeds from the proposed sale will be used to buy additional BTC, further aligning the company's strategy with the flagship crypto's growth.

"We highlight how MicroStrategy co-founder Michael Saylor has become synonymous with the Bitcoin brand," the report stated.

The analysts also noted that MicroStrategy's position as the leading Bitcoin company has helped attract "at scale capital (both debt and equity) for an active Bitcoin acquisition strategy."

In dollar terms, the report highlighted that MicroStrategy's Bitcoin net asset value (NAV) per share "has grown nearly fourfold, surpassing the 2.4x growth in Bitcoin’s spot price."

"We believe MSTR’s long term convertible debt strategy allows it enough time to gain from Bitcoin upside, with limited liquidation risk to its Bitcoin on balance sheet," the analysts concluded.