Bernstein, the global asset management firm, expressed optimism about the potential approval of a bitcoin exchange-traded fund (ETF), foreseeing a bullish scenario. In a recent note, Bernstein analyst Gautam Chhugani predicted that Bitcoin’s price could surge to $150,000 by 2025. The optimistic projection hinges on the anticipation of the U.S. Securities and Exchange Commission (SEC) approving a bitcoin ETF by the first quarter of 2024. This estimate is substantially higher than Bitcoin’s current price of around $34,000 and more than double its previous all-time high of over $67,000, achieved in November 2021. Moreover, Bernstein anticipates that approving a Bitcoin ETF would redirect up to 10% of Bitcoin’s circulating supply into ETFs. Such approval would enable traditional investors to gain direct exposure to Bitcoin through their investment portfolios. Currently, the only similar product available is Grayscale’s Bitcoin Trust (GBTC), which holds approximately 3% of the total outstanding Bitcoin.
Chhugani explained, “You may not like Bitcoin as much as we do, but a dispassionate view of Bitcoin as a commodity suggests a turn of the cycle.” He also stated that “SEC approved ETFs by the world’s top asset managers (BlackRock, Fidelity et al) seems imminent.” In addition to the Bitcoin price prediction, Chhugani initiated coverage of various Bitcoin mining companies, highlighting the “halving” event expected in April 2024. During the halving, Bitcoin rewards are halved, leading to reduced supply. Chhugani suggested that this event could result in “losing miners” exiting the market, creating opportunities for the survivors. While Bitcoin has recently surged to $35,000, its highest level since May 2022, investors remain hopeful for an ETF approval by the end of the year. However, the SEC’s historical stance, as articulated by Chair Gary Gensler, who has raised concerns about the crypto industry’s risks, means the outcome remains uncertain. The industry has faced regulatory challenges, including the SEC’s lawsuit against Binance for securities violations and the bankruptcy filing by crypto exchange FTX last year, with its former CEO, Sam Bankman-Fried, currently on trial for fraud.