Bernstein has predicted that Bitcoin will rise to $200,000 by the end of 2025 as it continues to gain traction as an institutional asset and the regulatory landscape improves, based on excerpts shared by VanEck’s head of digital asset research: Mathew Sigel.
The bold prediction is part of Bernstein’s latest “Black Book,” titled “From Coin to Compute: The Bitcoin Investing Guide,” which examines Bitcoin’s evolving role in financial portfolios and the computer economy.
The report highlights Bitcoin’s potential to go beyond speculative trading, and presents a strong case for long-term investment opportunities, driven by its increasing adoption among institutional investors.
Bernstein “Black Books” are comprehensive and in-depth research reports produced by global investment management and research firm Bernstein Research. These reports are often considered authoritative analyzes of specific industries, companies or financial assets, providing detailed insights, forecasts and strategic advice.
Institutional adoption
One of the key insights in the report is the increasing adoption of Bitcoin among institutional investors, who manage the asset’s liquidity and volatility risks.
The report compares Bitcoin’s liquidity profile to that of traditional assets such as stocks and commodities, showing that while BTC poses higher liquidity risks due to its shorter liquidity duration, institutional investors are still including it in their portfolios.
According to Bernstein, this reflects Bitcoin’s appeal as a long-term hedge against inflation and macroeconomic instability.
The report further suggests that institutional investors are not deterred by Bitcoin’s high volatility; instead, they deploy sophisticated risk management strategies to limit potential pullbacks, including adjusting portfolio allocations and liquidity buffers to accommodate Bitcoin’s market behavior.
The computer economy
Bernstein’s analysis also shifts the focus to Bitcoin’s future role in what it calls the “computational economy.”
The report suggests that Bitcoin is moving beyond its traditional function as a store of value and is becoming an essential part of the global computing landscape.
This involves leveraging Bitcoin’s underlying blockchain infrastructure for computing tasks, which could fuel advances in technology and data processing.
According to Bernstein, global Bitcoin miners are already scaling up their computing capabilities, with mining pools expanding across different regions.
The report identifies this growing computing power as a key factor in Bitcoin’s expected price rise. By deploying blockchain technology for tasks beyond crypto transactions, Bitcoin could unlock new avenues for technological growth.
Regulatory challenges
Despite regulatory uncertainty, especially in the US, Bernstein’s report suggests that regulatory clarity could provide a significant boost to Bitcoin’s institutional adoption.
The report highlighted continued scrutiny from regulators such as the Securities and Exchange Commission (SEC), but suggested that once clear frameworks are established, institutions will feel more confident in increasing their exposure to Bitcoin.
This regulatory clarity would allow institutions to more effectively manage compliance risks while expanding their Bitcoin holdings. Bernstein’s analysis concludes that a clearer regulatory environment could be a catalyst for Bitcoin to reach its expected $200,000 price target.