Bitcoin could be blowing through the roof, according to a new report by brokerage firm Bernstein. The investment firm has made a forecast that Bitcoin could reach $200,000 by 2025, $500,000 by 2029, and imagine you are not dreaming, $1 million by 2023. And mark you, this is the price per one token of Bitcoin; crazy, right?
This report comes after another report where Bernstein had predicted that the value of Bitcoin could hit $150,000 by 2025. The optimistic predictions are a result of strong inflows into Spot US Bitcoin ETFs that were since approved in January.
The projection assumes that by the end of 2025, Spot Bitcoin ETFs will account for approximately 7% of the total supply of Bitcoin.
Bitcoin price action after the halving
It is quite clear that even after the recent weakness of BTC, the prediction of hitting $200,000 by the end of next year is still alive. Analysts have been closely monitoring Bitcoin prices after the fourth mining reward halving and they are sure of what they are saying.
History has proven that having a BTC halving paves the way for a multi-fold price rise in the months after the event. The fourth halving happened on April 19, 2024, when the block reward was cut down from 6.25 BTC to 3.125 BTC.
A blog by the popular crypto payment service, BitPay, elaborates on the halving effect since the first halving in 2012. After the 2012 halving, Bitcoin’s price rocketed by around 9,500% and peaked at $1,152 in 2013.
At the time of the second halving, the price of BTC was $664, and it jumped to hit a peak of $17,760 the following year. The price of Bitcoin reached a peak of $67,549 in 2021, 546 days after the 2020 halving.
Analysts expect that the crypto will follow the same trend as the former halvings. If history repeats itself, then you can expect to see an all-time BTC peak between June and October 2025. In such a trend, the ambition of the $200,000 will be reached comfortably.
The road to $1 million relies on clear regulations and lower rates
Regulation is among the most critical aspects affecting Bitcoin pricing. Clear rules will give a good opportunity for both big institutions and everyday people to invest safely in the digital coin.
Unfortunately, the rise of BTC popularity has been thwarted every time a government has cracked the policy whip. For example, Bitcoin suffered massively when China made it clear that they did not want to engage in any crypto business.
In September 2021, a news article by BBC explained that in the wake of China’s announcement on banning all cryptocurrency transactions, the price of Bitcoin fell by more than $2000. The price of BTC had been falling during the China crackdown, and the camel’s back was finally broken when China’s central bank officially banned it.
On the flip side, whenever Bitcoin has a “win,” regardless of how small, its value seems to escalate. For example, Bitcoin Spot ETF was finally approved after years of denial from regulators. This approval caused the price of Bitcoin to soar up in the following months to surpass $73,000 in value. Well, this is a big win for the crypto nation, but you get the point, a win means a soar in prices.
Interest rates, on the other hand, have always had a direct impact on the value of cryptocurrencies.
Octavio Sandoval, director of investments at Illumen Capital, made a statement saying that when the Fed increased the rates in 2022, the value of equity and cryptocurrencies appropriately went down. This clearly shows that if the rates are lower, the value of Bitcoin will be higher since investors will be more willing to invest in it.
The potential effect of the growing distrust on the government
The blockchain system has often been referred to as “trust machines.” The only problem has been getting people to trust it. Big institutions have failed to show interest in it and this has made people less interested in the same.
However, over the past few years, the general population has been growing a consistent distrust in the traditional institutions. This is a double-edged sword that creates a worry for the country but acts as constructive news to the decentralized assets like Bitcoin.
A recent study by the Partnership for Public Service reported that only 23% of the American population trusts the federal government. This goes down from the 35% in 2022. To make matters even worse, only 15% of the population thinks that the government is transparent, and imagine, 66% feel that it is incompetent.
This is very worrisome. These numbers clearly show that people are losing faith in the centralized system, which could be a big win for decentralized systems like Bitcoin.
The current global trends are showing a great future for Bitcoin. There is some great optimism in the air, especially from investment analysts, showing that Bitcoin’s value might hit the $1 million mark within a decade.
Even though there are some factors that are acting out of favor with the digital coin, such as not so clear regulations, there is much evidence that whatever the analysts are saying might be true.