After flirting with but ultimately missing all-time highs earlier in June, bitcoin stumbled last week. Experienced cryptocurrency investors know one week usually doesn’t make or break bitcoin’s fortunes. Nor does such a short time frame act as accurate commentary on the digital currency’s long-term prospects.
Advisors and investors considering bitcoin exposure, including via spot ETFs, might want to consider that even when accounting for the crypto’s recent malaise, many market observers are wagering significant long-term price appreciation for bitcoin.
For example, research firm Bernstein sees the largest digital currency soaring to $500,000 by the end of this decade. That’d be a roughly seven-fold increase from current levels. Obviously, that’s a massive increase and one that could take years to be realized. But it’s not impossible.
Bernstein Betting on Bitcoin Fundamentals
Bitcoin’s supply and demand dynamics are widely mentioned as a potential catalyst for the digital asset. Its supply is fixed at 21 million coins, but demand is increasing from a variety of channels. That includes the aforementioned spot ETFs, which debuted in the U.S. earlier this year. Other countries are approving such ETFs, in essence introducing more demand.
“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,” observed Bernstein analysts Gautam Chhugani and Mahika Sapra.
The analysts forecast bitcoin to ascend to $200,000 at some point next year before hitting $500,000 in 2029 and $1 million in 2033. Even the $200,000 forecast is pertinent. That’s because the Bernstein duo previously estimated the digital currency would hit $150,000 next year.
Bullish on MSTR
On the crypto-correlated equity side, Bernstein is bullish on MicroStrategy (MSTR), which controls 1.1% of global bitcoin supply.
“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,” according to Bernstein.
Eighty-four ETFs hold shares of MicroStrategy, which is one of the stocks most correlated to bitcoin prices. ETFs with large weights to the shares include the Invesco Alerian Galaxy Crypto Economy ETF (SATO), the Bitwise Crypto Industry Innovators ETF (BITQ) as well as the Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF (BLKC) and the VanEck Digital Transformation ETF (DAPP), among others.
VettaFi LLC (“VettaFi”) is the index provider for BLKC, for which it receives an index licensing fee. However, BLKC is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of BLKC.
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