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Bernstein Research, the leading research arm of global asset manager AllianceBernstein, projects that Bitcoin will reach $200,000 by the end of 2025. The company, which managed $791 billion in assets as of August 2024, called this prediction “conservative” in its latest report. The 160-page “Black Book” on Bitcoin.
Why BTC Price Will Hit $200,000 By 2025
Bernstein’s report, titled “From Coins to Computing: A Bitcoin Investment Guide,” explores the multifaceted dynamics driving Bitcoin’s rise. The company highlighted a surge in institutional adoption, a growing market for Bitcoin exchange-traded funds (ETFs), and the growing role of Bitcoin miners in the cryptocurrency and artificial intelligence (AI) sectors.
“If you’re skeptical of Bitcoin… perhaps in short supply, the ‘store of value’ digital asset isn’t a bad thing in a world where US debt is at a new record ($35 trillion currently) and the threat of inflation still looms. If you like gold here, you should like Bitcoin more,” wrote Gautam Chhugani, Managing Director and Senior Analyst at Bernstein.
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This report highlights significant changes in institutional investment patterns. According to Bernstein, the global asset manager now has Bitcoin and Ethereum ETFs worth about $60 billion, a fivefold increase from $12 billion in September 2022. The firm described the launch of these ETFs as “the most successful in the history of exchange-traded funds. ,” recorded an inflow of $18.5 billion since its introduction in January.
“By the end of 2024, we predict Wall Street will replace Satoshi as the top Bitcoin wallet,” the report said. Bernstein attributed the spike to the logistical challenges of self-custody for retail investors. “With many institutional players turning to Bitcoin, ETFs are proving to be an entry point for large-scale investments in digital assets,” the firm noted.
Bernstein’s bullish stance on Bitcoin is supported by his analysis of market trends and institutional behavior. BTC’s price has appreciated by 120% over the past 12 months, with its market capitalization swelling to $1.3 trillion.
“As institutional adoption accelerates, we expect Bitcoin to triple its current level,” Bernstein projected. The company anticipates that Bitcoin’s market capitalization could increase to more than $3 trillion by the end of 2025, driven by increased allocations from wealth management platforms, pension funds and registered investment advisors.
The report also suggests that larger financial institutions will play a more dominant role as the market matures. “This new institutional era, in our view, could push Bitcoin to the $200,000 level by the end of 2025,” the analysts wrote, stressing that the estimate is “conservative” given the current trajectory of institutional engagement.
Bitcoin Treasury and Mining
Another focal point of Bernstein’s report is the increasing adoption of Bitcoin as a corporate financial asset. The company highlights MicroStrategy Incorporated (NASDAQ: MSTR) as a pioneering example. Led by CEO Michael Saylor, MicroStrategy has allocated more than 99% of its cash holdings to Bitcoin, owning approximately 1.3% of the total Bitcoin supply.
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“We view MicroStrategy as an active leveraged Bitcoin equity strategy,” Bernstein said, pointing out that the company’s shares have offered superior returns compared to holding Bitcoin directly or via an ETF.
Bernstein’s report also highlights the consolidation trend in the Bitcoin mining industry. Big players like Riot Platforms (NASDAQ: RIOT), CleanSpark (NASDAQ: CLSK), and Marathon Digital Holdings are acquiring small miners, leading to an industry dominated by industrial-scale operations.
“Leading Bitcoin miners in the US are consolidating their holdings and becoming energy infrastructure players,” the report notes. “We hope Riot, CleanSpark and Marathon can consolidate the Bitcoin mining industry.” Bernstein estimates that these leading miners will control 30% of Bitcoin’s total hashrate by 2025.
The analysts further explored the synergies between Bitcoin mining and AI infrastructure. Bitcoin miners are emerging as attractive partners for GPU cloud providers, offering access to gigawatt-scale energy and reducing “time to market” for powering AI data centers.
“Miners provide an energy arbitrage opportunity, trading at $2-4 million per megawatt, compared with $30-50 million per megawatt for legacy data centers,” Bernstein observed. Companies like Core Scientific and Iris Energy are taking advantage of this by developing AI data centers alongside Bitcoin mining operations.
“Bitcoin miners are evolving into important partners for AI data centers as they leverage excess energy capacity and offer efficient solutions for high-performance computing,” said Bernstein. This convergence not only diversifies revenue streams for miners but also improves the sustainability and scalability of AI infrastructure.
At press time, BTC was trading at $67,162.
Featured image created with DALL.E, a chart from TradingView.com