In an analysis released Thursday, leading global investment firm AllianceBernstein with assets under management worth $725 billion significantly elevated its price target for Bitcoin, predicting the premier cryptocurrency will reach $1 million by 2033. This bullish outlook is underscored by a new wave of adoption via US spot Bitcoin exchange-traded funds (ETFs) managed by heavyweight asset managers including BlackRock, Fidelity, and Franklin Templeton.

Bitcoin’s Path To $1 Million In 2033

Analysts Gautam Chhugani and Mahika Sapra from Bernstein outline a detailed scenario where they expect the assets under management in Bitcoin-related ETFs to escalate to about $190 billion by 2025, a substantial leap from the current $60 billion. The report states, “We believe that the US regulated ETFs were the watershed moment for crypto that brought in structural demand from traditional pools of capital.”

They highlighted the considerable impact of these funds, which have already funneled approximately $15 billion in net new flows into the market.

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The report extrapolates that by 2025, Bitcoin ETFs will represent about 7% of all Bitcoins in circulation, and by 2033, this figure could rise to around 15% of the total Bitcoin supply. This significant uptick in institutional interest and investment is poised to play a critical role in driving Bitcoin’s price upward.

A critical aspect of Bernstein’s analysis is the effect of Bitcoin’s supply mechanics, particularly the halving events. The most recent halving in April cut the block reward for miners from 6.25 BTC to 3.125 BTC, effectively halving the daily new supply from 900 BTC to 450 BTC.

According to Chhugani and Sapra, “The halving presents a unique circumstance, where natural Bitcoin sell-pressure from miners declines by half (or even more, as they inventory more in anticipation), while new catalysts for bitcoin demand arise, leading to exponential price moves.”

Historically, after halving events, BTC has experienced significant price rallies. The analysts draw on past cycles for context: in 2017, Bitcoin surged to approximately five times its marginal cost of production, then bottomed at 0.8 times in the following year. A similar pattern was observed in the 2021 cycle.

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For the 2024-27 cycle, they project a more conservative yet substantial increase to 1.5 times Bitcoin’s marginal cost of production, translating to a predicted mid-cycle high of $200,000 by mid-2025. In the following cycle, Bernstein expects the Bitcoin price to reach half a million US dollars by 2029, before breaking the $1 million mark four years later.

Outlook For MicroStrategy

In tandem with their Bitcoin outlook, Bernstein also initiated coverage on MicroStrategy with an outperform rating, targeting a price of $2,890 for the stock by the end of 2025. MicroStrategy has become notable for its BTC acquisition strategy, now holding 214,400 BTC, or 1.1% of the cryptocurrency’s circulating supply, valued at approximately $14.5 billion.

MicroStrategy’s aggressive acquisition of Bitcoin, funded through convertible notes—a form of long-term debt that converts into stock under specific conditions—demonstrates a robust investment strategy which the analysts believe offers “limited liquidation risk” due to the already profitable nature of their holdings based on today’s Bitcoin prices. They foresee MicroStrategy’s holdings increasing to 1.5% of the Bitcoin supply by 2025.

At press time, BTC traded at $66,946.

Featured image created with DALL·E, chart from TradingView.com