After a period of consolidation, the cryptocurrency market recently shows signs of recovery, and the price of Bitcoin (BTC) has become active again, repeatedly testing and briefly standing above the $95,000 mark, demonstrating considerable resilience. Market attention is once again focused: Can Bitcoin break through the current resistance and hit the $100,000 mark, or even set a new historical high?
Against this backdrop, analysts from several well-known financial institutions have spoken out, pointing out a series of positive signals, particularly the strong demand from corporate accumulation and spot ETFs, which is triggering a significant supply squeeze that could lay the foundation for Bitcoin's next round of record-breaking growth.
Analysts from research and brokerage firm Bernstein are particularly optimistic about Bitcoin's outlook. They believe that although Bitcoin's price may be influenced by short-term correlations with gold or tech stocks (such as the Nasdaq index), this short-term correlation can be misleading. More importantly, the core factors driving Bitcoin's supply and demand fundamentals should be closely watched, and currently, there are three major signs indicating that a 'supply squeeze' is forming, which is likely to push Bitcoin to new heights:
Retail selling pressure has exhausted: After a period of market adjustment, the selling pressure from retail investors seems to have been largely digested, making the market bottom more solid.
The competition among companies to accumulate Bitcoin is intensifying: An increasing number of companies are joining the ranks of Bitcoin accumulators. In addition to the well-known Bitcoin whale Micro Strategy (which recently spent another $1.4 billion to increase its holdings, surpassing 550,000 BTC), new participants continue to emerge. For instance, Soft Bank, stablecoin issuer Tether, cryptocurrency exchange Bitfinex, and Cantor Fitzgerald recently announced the establishment of a joint venture called 'Twenty One Capital,' focusing on corporate Bitcoin financial strategies, with an initial plan to hold 42,000 Bitcoins and substantial funding from Soft Bank ($900 million), Tether ($1.5 billion), and Bitfinex ($600 million). The company also plans to merge and go public through a SPAC (Special Purpose Acquisition Company) with Cantor Equity Partners and further raise funds. Bernstein analysts pointed out that although Twenty One's capital base may not be as strong as Micro Strategy (the latter raised about $22 billion through various financial instruments in 2024), its backers are strong (especially Tether, which has gained enormous profits from issuing USDT), indicating that 'the Bitcoin accumulation game is becoming increasingly competitive.' Statistics show that approximately 80 companies currently hold about 700,000 Bitcoins, accounting for 3.4% of Bitcoin's total supply of 21 million.
Bitcoin spot ETF funds are flowing back in, with an increase in institutional participation: Since being approved for listing in the U.S. in January this year, Bitcoin spot ETFs have become an important channel for absorbing funds. Although ETF inflows had stalled during the period when Bitcoin prices fell from a peak of over $109,000 to below $75,000, strong net inflows have recently reappeared. Last week, the net inflow of U.S. Bitcoin spot ETFs exceeded $3 billion, reaching the highest level in five months and the second-highest record in history. Currently, all Bitcoin spot ETFs combined hold more than 5.5% of the total supply, with a total asset management scale of approximately $110 billion. More importantly, institutional investor participation has significantly increased. Bernstein noted that approximately 33% of the total assets managed by ETFs are held by institutional investors (up from 20% in September last year), with 48% held by investment advisors (likely representing portfolio allocation), and another 31% held by hedge funds (possibly used for arbitrage trading). If the Bitcoins held by ETFs and companies are combined, their total amount accounts for about 9% of Bitcoin's total supply, which is seven times more than at the time of the ETF launch.
Moreover, Bernstein analysts also noted that the percentage of Bitcoin balances held by exchanges has decreased from 16% at the end of the previous year to the current 13%, which is also seen as a potential indicator of supply tightening. However, other analysts believe that this decrease in balance may simply reflect a transfer from exchanges to ETF custodians (such as Coinbase), and the overall Bitcoin balance controlled by centralized institutions may not have changed significantly.
Based on an analysis of supply and demand dynamics, Bernstein reiterated its extremely optimistic long-term forecast: Bitcoin is expected to reach approximately $200,000 by the end of 2025, $500,000 by the end of 2029, and $1 million by the end of 2033 (during which it will experience periodic bear markets). They emphasized: "In the long term, we believe Bitcoin's fundamentals are driven by its own demand trajectory and its mathematically proven supply of 21 million that cannot be changed. Given the current supply and demand dynamics, we find it hard to hold a pessimistic view on this asset."
Notably, Geoffrey Kendrick, the global head of digital asset research at Standard Chartered, is also optimistic about Bitcoin's short- and medium-term outlook, expecting Bitcoin to soon usher in the next wave of growth. In his latest report, he listed several indicators that support his judgment:
U.S. Treasury term premium reaches a peak: This indicator has a high correlation with Bitcoin prices, having reached its highest level in 12 years, which may indicate that market bullish sentiment towards Bitcoin is heating up.
Change in investor behavior: Analysis of trading sessions shows that U.S. investors are actively seeking to allocate non-U.S. assets, especially after President Trump previously announced a 90-day tariff grace period for all countries except China. Meanwhile, Asian investors are also actively buying Bitcoin, collectively boosting upward momentum.
Whales continue to accumulate: Large holders (whales) with more than 1,000 Bitcoins are still buying during market downturns, consistent with the whale behavior pattern observed before past bull markets.
Funds flowing from gold to Bitcoin: Data from ETF fund flows over the past week shows that funds are flowing out of gold ETFs and into Bitcoin ETFs, highlighting the increasing attractiveness of Bitcoin as a store of value and a safe-haven asset.
Kendrick further elaborated on his view of the roles of Bitcoin and gold in investment portfolios. He believes that Bitcoin's primary role is as a tool to hedge risks in the existing financial system, in which respect its decentralized nature makes it more effective than gold. Gold, on the other hand, is better suited to counter geopolitical risks.
Based on the above analysis, Kendrick provided a very optimistic forecast for Bitcoin's price performance: Bitcoin is expected to reach an all-time high of $120,000 in the second quarter of 2025, maintaining its long-term bullish view of Bitcoin surging to $200,000 by the end of 2025.
In summary, the analyses from Bernstein and Standard Chartered point to a common conclusion: Against the backdrop of Bitcoin's limited supply (and the reduction of new supply with halving), the continuous and strong demand from corporate accumulation and ETFs is causing significant supply tightness. This 'supply squeeze,' combined with potential future catalysts (such as further adoption by institutions and sovereign nations), provides strong fundamental support for Bitcoin's price to reach new highs in the near future.
Although market volatility is inevitable in the short term, from a longer-term perspective, these institutional analysts generally believe that the upward trajectory of Bitcoin, driven by its inherent scarcity and growing demand, remains clear. For investors, understanding the current supply and demand dynamics and potential future drivers is crucial for grasping Bitcoin's long-term investment value. Of course, all investments come with risks, and the cryptocurrency market is no exception; investors should make decisions based on thorough research and risk assessment.
