Bernstein expects Bitcoin (COIN:BTCUSD) to reach $300,000 by the end of 2029, with analyst Gautam Chhugani identifying the cryptocurrency as a major potential beneficiary of what he describes as the debasement trade.
The forecast assumes Bitcoin continues to broadly follow its historical four-year market cycle, with Bernstein also expecting the cryptocurrency to recover to a new record high of $150,000 by the middle of 2027.
“Following our price-to-marginal cost framework, we would expect the next market peak to be $300K by CY2029E and the market recovering to new all-time high of $150,000 by mid-2027E,” Chhugani wrote in a note to clients.
Sovereign debt supports Bernstein’s debasement thesis
Bernstein’s longer-term Bitcoin outlook is partly based on its view that the four-decade period of declining interest rates has come to an end.
Governments are consequently facing higher debt-servicing costs at a time when sovereign debt levels have reached unprecedented levels, creating additional pressure on public finances.
According to Bernstein, higher yields can produce a self-reinforcing cycle in which increased interest expenses contribute to wider fiscal deficits, requiring governments to borrow even more.
“Faced with the choice between fiscal stress and currency debasement, we believe the policymakers will ultimately favor the latter, as it is politically less disruptive,” the firm said.
Under that scenario, Bernstein believes investors could increasingly seek scarce assets whose supply cannot easily be expanded or diluted.
Bitcoin viewed as leading scarce asset
Bernstein considers Bitcoin particularly well positioned within that environment, describing it as the leading hard asset for the debasement trade.
The firm highlighted the composition of Bitcoin’s investor base as one reason for its view. Around 60% of the cryptocurrency is held by investors that Bernstein considers relatively insensitive to price movements, including through drawdowns exceeding 50%.
At the same time, institutional and retail access to Bitcoin continues to expand, providing additional channels for capital to enter the market.
Together, Bernstein believes those characteristics could support Bitcoin through future market cycles and contribute to the projected move towards $300,000 by 2029.
Bernstein lowers Strategy price target
Bernstein also revised its outlook for Strategy (NASDAQ: MSTR), lowering its price target to $350 from $450 while maintaining an Outperform rating on the shares.
The firm noted that Strategy remains the world’s largest corporate holder of Bitcoin, with holdings representing approximately 4% of the cryptocurrency’s global supply.