Bernstein predicted bitcoin capitalization to grow to $3 trillion in 2025

Bernstein: bitcoin capitalization will grow to $3 trillion by 2025

Analysts write that 70% of available bitcoin supply has not moved from one wallet to another within a year

Bitcoin has never looked so attractive from a fundamental point of view, and its capitalization could grow to $3 trillion by mid-2025, writes Coindesk with reference to a report by the analytical company Bernstein.

According to experts, during the last year, 70% of the available supply of bitcoin has not moved from one wallet to another. "This is a record high in the history of bitcoin. This rate of churn is unusual for a financial asset, especially one so notorious for exponential movements caused by shrinking supply," the analysts wrote in the report.

The document also points out that the catalyst for the growth of the first cryptocurrency may be the approaching halving next spring. Bernstein estimates that this event will reduce the monthly pressure of miners on the price of bitcoin from $1 billion to $500 million.

Bitcoin mining is an energy-intensive process in which miners use specialized devices to validate transactions in the bitcoin blockchain and earn rewards in the form of new coins. Now, for each block of transactions added to the blockchain, miners receive 6.25 BTC, which is equivalent to about $228,000 at the exchange rate as of Nov. 16. Such remuneration motivates them to keep the network up and running.

The reward is halved every 210,000 blocks as a result of so-called halving, which occurs about once every four years. Miners also receive transaction processing fees, an additional source of revenue that becomes increasingly important as the reward per added block decreases.

In addition to halving, Bernstein expects bitcoin to rise on the back of the potential approval of the ETF by the U.S. Securities and Exchange Commission (SEC). According to them, a favorable decision from the regulator would give a green light for institutional investors to enter the digital asset market.

Various ETFs, including gold, have trillions of dollars in assets under management. In the cryptocurrency community, it is generally accepted that even a small percentage of this capital can potentially impact the global crypto market. If spot bitcoin ETFs are approved, demand for the cryptocurrency will increase: buying shares in the funds involves the delivery of bitcoin as an underlying asset, i.e. its direct purchase in the market, affecting the exchange rate.

In early November, Bernstein analysts wrote that they expect the approval of bitcoin-ETF in the first quarter of 2024 and growth in the value of the first cryptocurrency to $150 thousand by 2025.

Several major institutional players have already applied for bitcoin-ETFs. The launch of these investment products is considered in the crypto community as a catalyst for a new bull cycle in the market. According to analysts at Bloomberg Intelligence, there is an estimated 90% chance that the SEC will approve the ETFs in early January 2024.

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