Bitcoin will hit $500,000 by the end of this decade as ETF demand booms, Bernstein says (2024)

• Bitcoin is predicted to hit $500,000 by 2029, according to Bernstein.
• The bullish outlook is driven by a sustained boom in demand for bitcoin ETFs, combined with constrained supply.
• Bernstein initiated MicroStrategy stock at"Outperform" with a $2,890 price target.

The price of bitcoin is set to soar to $500,000 by the end of the decade, according to a recent note from Bernstein.

In an initiation note of MicroStrategy stock, Bernstein analysts Gautam Chhugani and Mahika Sapra said bitcoin is poised to soar 659% from Friday afternoon levels to hit half-a-million dollars by 2029.

The culprit for the massive price increase is booming demand for bitcoin ETFs, which have attracted tens of billions of dollars in assets since their launch earlier this year.

That soaring demand, combined with an ever-dwindling supply of bitcoin, creates a ripe supply-and-demand dynamic that should thee the cryptocurrency continue to rise in price.

"This is led by unprecedented Bitcoin demand ($190Bn AUM in 2025E vs. $60Bn today) via ETFs run by the world's leading asset managers, and Bitcoin supply being constrained," Bernstein said.

Chhugani and Sapra said their base case projection for the price of bitcoin is $200,000 by 2025, $500,000 by 2029, and $1 million by 2033.

The analysts had previously expected bitcoin to reach a cycle high of $150,000 in 2025, but they upped their estimates due to strong ETF flows.

The firm's forecast was part of its note initiating coverage of Microstrategy, which Bernstein said is "building the world's largest Bitcoin company."

The firm rates MicroStrategy at "Outperform" with a $2,890 price target, representing potential upside of 94% from Friday afternoon's price.

MicroStrategy has amassed 1.1% of the total bitcon supply, an amount that's worth about $14.5 billion. Meanwhile, MicroStrategy has a total market valuation of $26 billion.

Bernstein argues that MicroStrategy deserves the premium valuation as it offers investors an "active-leveraged" strategy compared to passive bitcoin ETFs.

"Over the last 4 years, MSTR's active strategy has delivered a higher Bitcoin per equity share - BTC/share has grown 67% i.e. from 6 bitcoin per diluted share in Q4'2020 vs. ~10 today," Bernstein said.

Bitcoin traded just above $65,000 on Friday, about 12% below its record high of nearly $74,000.