Bitcoin will reach 150 thousand dollars by mid-2025, predicts Bernstein

The price of bitcoin will reach 150 thousand dollars by 2025, thanks to the upcoming halving and approvals of spot ETFs, Bernstein announced in a report on Monday.

Analysts from the crypto unit of the asset manager worth 691 billion dollars modeled the future price of the asset based on the marginal cost of production for miners.

Defining the marginal cost

Bernstein highlights the four-year cycle theory in its report, the idea that the price of bitcoin moves in four-year patterns related to its halving schedule.

The schedule halves the inflation rate of bitcoin every 48 months. The next halving is estimated to occur in April, reducing the issuance from 6.25 to 3.125 bitcoins per block.

– In the year of halving, as the selling pressure is halved, new demand catalysts emerge with each cycle, leading to a new price breakout that signals the start of a new bitcoin price cycle – wrote analysts led by Gautam Chhugani.

In previous cycles, bitcoin peaked at prices that were multiples higher than its marginal production costs, such as 5.5x in 2017 and 2.1x in 2021. By mid-2025, researchers expect the price of bitcoin to exceed 1.5 times its marginal production costs, which would be 150 thousand dollars.

The marginal cost of bitcoin production is the cost of the least efficient miner to produce bitcoin. This cost increases with each cycle, as increased miner competitiveness and bear markets ‘wash out high-budget inefficient miners’.

– We observe a pattern of bitcoin as a multiple of marginal costs that narrows with each cycle – the report states. This is partly due to the law of large numbers, meaning that the return on bitcoin will decrease as the asset’s capitalization becomes larger.

Impact of ETFs

As selling pressure on the supply side decreases, Bernstein expects demand for bitcoin to rise following the likely approval of a spot bitcoin ETF in the U.S. by early January.

By 2028, analysts predict that more than nine percent of bitcoin in circulation will be held within ETFs, and that demand for ETFs after the halving will exceed miner supply by six to seven times at its peak.

– Bitcoin ETFs will lead to new flows into the asset and easy purchasing through brokerage accounts, wealth advisors, etc. – added Chhugani.

Some analysts predict that both the halving and ETF approval could potentially harm bitcoin mining companies. While the former means less bitcoin generated for miners, the latter could mean that institutions investing in shares of mining companies as a proxy for bitcoin will sell their shares to buy the ‘real thing’.

When asked about this theory, Chhugani dismissed such concerns.

– Most views on miners are incorrect because no one assumes a new price cycle, which would increase miners’ revenues in dollar-denominated terms. We have strong confidence that a new cycle is coming, which will bring bitcoin to 150k driven by supply curves and miners’ costs as we highlight – he stated.