After trading lower or sideways for much of the past seven months. Bitcoin(Cryptocurrency: BTC) He may finally be ready for his big break. Investment firm Bernstein has released a report detailing all the reasons why they think Bitcoin could reach an all-time high of $200,000 by the end of 2025.
Based on Bitcoin's current price of around $68,000, this equates to an increase of almost 200%. As a result, billionaire investors now appear to be rushing to buy the cryptocurrency. The most notable of these include hedge fund managers and tech entrepreneurs, all of whom appear to believe that Bitcoin is poised for a big rally after the 2024 presidential election. So are they right?
Michael Saylor, Executive Chairman micro strategy (NASDAQ:MSTR)perhaps the most prominent of the billionaire bulls. At the Bitcoin Conference in Nashville, Tennessee, this summer, he predicted that the digital coin's price could reach $13 million by 2045. And he continues to actively buy MicroStrategy, which now has more than $2 million in assets. 1% of all Bitcoins in the world.
Other tech billionaires have also gotten into Bitcoin, including Mark Cuban and Jack Dorsey. block. So are Silicon Valley's top venture capitalists, some of whom are currently involved in the 2024 presidential election. In a sign of his bullish outlook on cryptocurrencies, Dorsey recently predicted that the price of cryptocurrencies could reach $1 million by 2030.
Finally, there's the billionaire hedge fund manager who's stacking up a new spot Bitcoin exchange-traded fund (ETF). Based on Securities and Exchange Commission 13F data, it is possible to piece together which funds are buying it and how much they hold.
One of the biggest companies to watch is Millennium Management, led by billionaire Israel Englander, which loaded up on $2 billion worth of Bitcoin ETFs at the beginning of the year. In total, over 600 investment companies currently hold large amounts of Bitcoin ETFs.
Based on the above, it may be easy to conclude that these billionaires are buying Bitcoin primarily because they expect the price of Bitcoin to increase significantly in the short term. In the crypto industry, this is known as “Number Go Up.” You buy Bitcoin in the hope that the price of Bitcoin will go up, but you don't worry about why.
But that's likely an oversimplification of millionaire purchasing activities. Bernstein listed several compelling reasons to buy Bitcoin as part of his $200,000 Bitcoin price prediction.
Image source: Getty Images.
The first is what Bernstein calls a “new institutional era” for Bitcoin. This includes massive buy-in from institutional investors who now view cryptocurrencies as a separate asset class. And this includes the launch of a new Spot Bitcoin ETF.
In Bernstein's view, this new institutional era means that Wall Street institutions and billionaire investors will become Bitcoin's largest holders. With all the new money flowing into Bitcoin, the price is likely to skyrocket.
The second factor is the growing recognition that Bitcoin can act as a hedge against uncertainty. If you're worried about hyperinflation, buy Bitcoin. If you're concerned about the US government's $35 trillion debt burden, buy Bitcoin. If you are concerned about geopolitical tensions in the Middle East, buy Bitcoin.
So, for example, JP Morgan Chase(NYSE:JPM) We're talking about something called “trading in derogatory terms.” This mainly refers to the depreciation of the US dollar and the destabilization of the world. To hedge your risk, move your funds into Bitcoin or other assets that are deemed more stable. JPMorgan Chase & Co. suggests in a recent report that this down trade will continue into 2025, pushing the prices of both gold and Bitcoin higher.
Of course, you shouldn't buy Bitcoin just because wealthy billionaires are buying it. But you do need to learn to think like a millionaire. Rather than relying on simple “the numbers go up” argument, you can build a more sophisticated case for why you should buy cryptocurrencies.
From my perspective, the appeal of Bitcoin is that it can function as both a “risk-on” and “risk-off” asset. In other words, Bitcoin can thrive when bullish market sentiment prevails, but it can also be protected in down markets. That's why I'm bullish on Bitcoin heading into 2025. By the end of next year, we could be talking about digital assets trading for close to $200,000.
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JPMorgan Chase is an advertising partner of The Motley Fool's Ascent. Dominique Basurto has a position in Bitcoin. The Motley Fool has positions in Bitcoin and JPMorgan Chase and recommends Bitcoin and JPMorgan Chase. The Motley Fool has a disclosure policy.
Billionaires are buying this cryptocurrency, which could soar 200% in the next 12 months, says investment firm.
