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In the newly released investor NoteOne of the oldest American investment banks, HC Wainwright & Co. – founded in 1868 – expects a significant rise in the price of Bitcoin. According to the note, the institution revised its previous Bitcoin price target for the end of 2025 from $145,000 to $225,000, supported by a combination of historical trends, macroeconomic indicators, and emerging regulatory and institutional factors.
“We estimate that BTC will reach a cycle high of $225,000 by 2025,” the company said, referring to market cycles and the potential for a more supportive regulatory landscape for digital assets in the US in 2025 under new management.
Why Bitcoin could be worth $225,000 by the end of the year?
HC Wainwright’s analysis highlights several pivotal forces driving Bitcoin’s growth trajectory. One important catalyst is the wider availability of Bitcoin exchange-traded funds (ETFs) in the US, a development that could unleash new waves of institutional capital. The company also cites “accelerating adoption by institutional and corporate investors” as a major contributor to its bullish outlook.
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Moreover, investment banking models assume an overall market backdrop that improves in parallel with global liquidity, and that any regulatory burden will recede. HC Wainwright is keen to point out that the outlook is sensitive to macroeconomic conditions, particularly as measured by the M2 money supply, which has been trending lower since October.
Despite predicting a high six-figure price by 2025, HC Wainwright acknowledged that Bitcoin’s path towards $225,000 is unlikely to be a smooth ride. In the report, the bank warned that “drawdowns of approximately 20-30% during bull markets are not uncommon (…) and we estimate that Bitcoin could retreat to the mid-$70K range in early 1Q25 before resuming Its trend is upward.
They attribute these potential declines to Bitcoin’s historical volatility and its correlation to global liquidity trends.
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If Bitcoin reaches $225,000 per coin, HC Wainwright expects the total market cap of Bitcoin to be around $4.5 trillion – about 25% of gold’s current market cap of $18 trillion. This scenario translates into an increase of 113% from current levels. However, the note adds a striking scenario that has not yet been factored into its baseline forecast:
“Our new price target for 2025 does not take into account the possibility of the US government formally adopting BTC as a Treasury reserve asset at the federal level next year. If implemented, we believe it is plausible that Bitcoin could significantly exceed our base case price target.
The organization’s analysis also extends to the broader cryptocurrency market. Historically, Bitcoin dominance (share of the total cryptocurrency market capitalization) tends to decline during market peaks, falling to a low-40% range near the peak of the last bull cycle in November 2021.
Looking ahead, HC Wainwright expects Bitcoin dominance to decline to 45% by the end of 2025, down from around 56% currently. Under this assumption, the company expects the total cryptocurrency market to swell from $3.6 trillion today to nearly $10 trillion by the end of 2025.
HC Wainwright’s coverage universe of publicly traded Bitcoin mining companies is expected to benefit from the expected rise in prices. “If our forecasts are correct, there is potential for significant upward estimate revisions to our coverage universe over the course of next year.”
At press time, Bitcoin was trading at $96,221.
Featured image created with DALL.E, a chart from TradingView.com
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