Bernstein, a major asset manager with $725 billion in assets, predicts that Bitcoin’s value could reach just as $1 million by 2033, with a scale of $200,000 next year.
The bullish forecast comes after Bernstein introduced a hedge on software developer MicroStrategy, known as the Bitcoin holding, with an “outperform” rating.
MicroStrategy ultimately owns around 1. 1% of Bitcoin’s supply, valued at around $14. 5 billion at the time of writing.
Over the past four years, the company has grown from a hard-to-understand software company to one of the pioneers in the cryptocurrency space, according to a Bernstein research report.
Zoom out
Bernstein’s MicroStrategy policy is not so much an investment in MicroStrategy basics as it is a “leveraged” bet on Bitcoin. “MicroStrategy is positioned as an actively leveraged Bitcoin strategy for passive spot exchange-traded budgets (ETFs),” the report said.
Bernstein’s bullish outlook for Bitcoin prices is based on unprecedented demand for spot ETFs and a limited supply of cryptocurrencies, which could push Bitcoin to $500,000 through 2029, an increase from his previous estimate of $150,000 by 2025.
According to Bernstein, MicroStrategy’s long-term convertible debt strategy is its bid to capitalize on Bitcoin’s potential gains while also minimizing the threat of liquidation of its cryptocurrency holdings.
The report also mentions that the company has proposed a $500 million convertible debt sale to further increase its Bitcoin holdings.
Looking to the future
Bitcoin’s positive long-term outlook is strengthening as institutions embrace cryptocurrencies.
The world’s largest asset managers, including BlackRock and Fidelity, are now offering simple Bitcoin to individual investors, thanks to localized Bitcoin ETFs.
(A spot Bitcoin ETF is a type of investment fund that directly tracks the value of Bitcoin. It allows investors to buy shares that constitute ownership of Bitcoin itself, rather than making an investment through futures or other monetary products. )
According to Bernstein, those new “mainstream” inflows are the recent increases in Bitcoin’s value.
Analysts believe MicroStrategy will maintain its lead as the first publicly traded Bitcoin holder and a leveraged indirect bet on Bitcoin’s price. However, its merit over spot ETFs is not yet visible.
“MicroStrategy shares continue to offer investors gaining exposure to Bitcoin a number of significant advantages, in our view, over spot ETPs,” said TD Cowen analyst Lance Vitanza.
“Even if Bitcoin spot ETPs now serve as potential substitutes, we believe a premium [over Bitcoin] will still be warranted. “
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