Bitcoin Expected to Hit $1 Million USD by 2033
The year 2024 witnesses Bitcoin on a strong recovery path. Analysts at Bernstein expect BTC's price to potentially reach $1 million USD over the next decade based on statistical charts regarding Bitcoin.
Bitcoin Expected to Hit $1 Million USD by 2033
Bitcoin, the king of cryptocurrencies, is expected to achieve $200,000 USD by 2025, $500,000 USD by 2029, and surpass the $1 million USD mark by 2033, according to analysts at the research and brokerage firm Bernstein. The involvement of financial institutions, approval of Bitcoin spot ETFs, and cyclical factors are pivotal.
Bitcoin spot ETFs
The primary reason stems from Bitcoin spot ETFs, which are increasingly attracting attention from financial institutions. Analysts Gautam Chhugani and Mahika Sapra wrote in a recent report:
"It is expected that Bitcoin spot ETFs will be approved by large institutions and private banks in the latter half of this year. While there may be short-term challenges, the growth prospects for Bitcoin spot ETFs are immense."
ETF Bitcoin spot has marked a turning point in the cryptocurrency market, attracting over $15 billion USD since its launch in January 2024. Bernstein forecasts that by 2033, Bitcoin ETFs will own up to 15% of the total Bitcoin supply, significantly up from the current 4%.
Statistics show that Bitcoin ETFs are the fastest-growing ETFs. Source: Bernstein
Another critical factor for Bitcoin is its fixed supply of 21 million tokens, with 66% unmoved for over a year. This scarcity, coupled with increasing demand from institutional and individual investors, leads to higher demand than supply, expected to continue driving Bitcoin prices upward.
Bitcoin price chart based on supply and demand. Source: Bernstein
Statistics also indicate that Bitcoin held on exchanges has decreased from about 15% in 2021 to around 12% in 2023. Particularly, the balance of BTC on Coinbase has also sharply declined, as users withdraw Bitcoin from exchanges and hold them long-term, further reducing circulating supply.
Involvement of financial institutions
Bitcoin spot ETFs currently manage around $60 billion USD in assets and are expected to grow significantly. Major financial institutions are gradually accepting Bitcoin ETFs and increasing allocation ratios in investment portfolios, generating a substantial influx into the market.
Market value of asset types. Source: Bernstein
A chart demonstrates that even a small inflow from traditional markets into cryptocurrencies would trigger a powerful surge. Currently, the cryptocurrency market's value remains relatively small compared to real estate (approximately $290 trillion USD) and bonds (approximately $130 trillion USD).
Currently, individual investors own up to 78% of Bitcoin spot ETFs. However, financial institutions are increasing their share, creating stable demand and potential for the market.
Allocation percentage holding Bitcoin spot ETFs. Source: Bernstein
Cyclical nature
Bitcoin completed its fourth halving event at block number 840,000 on April 20, 2024, and BTC's price is expected to enter a growth cycle and set new highs, propelling the entire cryptocurrency market upward.
The Bitcoin Halving event every 4 years always creates significant price fluctuations. Each halving event typically leads to sharp price increases, followed by correction and price stabilization. Bernstein predicts that the price growth cycle scenario will continue to repeat in the future, with Bitcoin expected to reach $200,000 USD by 2025, $500,000 USD by 2029, and finally surpass $1 million USD by 2033.
Bernstein's price prediction cycle for Bitcoin. Source: Bernstein
Bitcoin is currently trading at $64,400 USD, continuously declining from its recent peak of $74,000 USD following market corrections on June 18. This trend seemingly contradicts Bernstein's predictions of continuous Bitcoin price uptrends in the near future.
1D chart of BTC/USDT pair on Binance at 03:50 PM on 21/06/2024
The decline in Bitcoin price is attributed to the outflow from US-based Bitcoin spot ETFs, marking the fifth consecutive year with $139.88 million USD withdrawn on June 20, following the holiday on Wednesday.
Cash flow of 11 Bitcoin Spot ETFs. Source Farside Investors
Only the IBIT fund from BlackRock recorded an inflow of $1 million USD. The GBTC fund from Grayscale witnessed an outflow of over $53 million USD. This was followed by the outflow of $51 million USD from the FBTC fund and $32 million USD from the BITB fund.
This week, over $900 million USD has been withdrawn from US Bitcoin spot ETFs, marking the worst performance of 11 ETFs in the US since late April 2024, when trading sessions from April 24 to May 2 recorded a total net withdrawal of $1.2 billion USD.
