Bitcoin prices bounce around. We all see it. Sometimes it acts like gold, a safe place for money. Other times, it runs with tech stocks, like those on the Nasdaq. It’s confusing, right? But the smart folks at Bernstein, a research firm, say don’t look too hard at those short-term links. They think other things matter more. Things like regular people finally running out of Bitcoin to sell, big companies buying lots of it, and money flowing back into those Bitcoin funds you can trade like stocks (ETFs).
- Bernstein analysts suggest that a Bitcoin supply squeeze, driven by limited sellers and increased institutional buying, is a key factor influencing price.
- A new company, Twenty One Capital, backed by SoftBank and Tether, plans to invest heavily in Bitcoin, mirroring MicroStrategy’s strategy.
- Money is flowing back into U.S. spot Bitcoin ETFs, indicating renewed investor interest and potentially driving prices higher.
These analysts say this setup is causing a “supply squeeze.” Think of it like everyone wanting the last cookie on the plate. Not many cookies left, lots of hands reaching. That makes the price go up. They figure this squeeze could push Bitcoin to new high prices.
Just last week, some big names got together. SoftBank, Tether, Bitfinex, and Cantor Fitzgerald started a new company called Twenty One Capital. Their plan? Buy a lot of Bitcoin for their company’s money stash. They aim to start with a big pile: 42,000 Bitcoins. That’s a serious amount of digital cash.
Where’s the money coming from? SoftBank is putting in $900 million. Tether, which makes a popular digital dollar (USDT), is adding $1.5 billion. Bitfinex is kicking in $600 million. This new group wants to join up with Cantor Equity Partners later and get even more money, another $585 million.
Bernstein says Twenty One wants to do what MicroStrategy did. MicroStrategy built up a huge amount of Bitcoin over time, raising billions to do it. Twenty One starts smaller, but its backers, like Tether, make tons of money ($13 billion in 2024 alone). So, they have deep pockets. The analysts put it simply: the game of companies buying Bitcoin is getting competitive. About 80 companies now hold Bitcoin, owning around 700,000 Bitcoins total. That’s about 3.4% of all the Bitcoin that will ever exist (21 million coins).
Bitcoin prices dropped for about two months. It fell from its top price near $109,000 down to just under $75,000. That was a slide. But things changed recently. Money is flowing back into the U.S. spot Bitcoin ETFs. Last week alone, over $3 billion came in. That’s the most in five months and almost the most ever in one week. Now, these ETFs have taken in more money than they lost for the year.
Bitcoin trades for around $95,295 right now. It moves fast, doesn’t it?
The Bitcoin held by these ETFs is a big deal. It’s over 5.5% of the total supply. That’s worth about $110 billion. Big investment firms hold a good chunk of this, about 33%. That’s up from 20% not too long ago. Investment advisors, who help people manage their money, hold almost half of that (48%). This likely means they are putting Bitcoin into people’s investment plans. Hedge funds hold less (31%), maybe using it for trading tricks.
Add up all the Bitcoin in ETFs and held by companies, and it’s almost 9% of the total supply. That’s seven times more than they held when the ETFs started in January 2024. That’s a lot of Bitcoin locked away.
And there’s another interesting twist. President Trump recently signed something saying the U.S. should look into having its own Strategic Bitcoin Reserve. Like storing gold in Fort Knox, but with Bitcoin. Bernstein thinks this could make countries start buying Bitcoin too. Beyond just companies and big investors. The analysts say companies and big investors buying now is strong enough to push Bitcoin higher next year. But if the U.S. government actually buys a lot? That’s not something anyone expects right now. It would likely make countries around the world start competing to buy Bitcoin, too.
Looking at Where Bitcoin Sits
Bernstein also points to Bitcoin balances on exchanges. These are the places where people buy and sell crypto. The amount of Bitcoin sitting on exchanges has gone down. It was 16% of the total supply at the end of last year. Now it’s 13%. Less Bitcoin on exchanges could mean less is available to sell easily, adding to that supply squeeze idea.
But hold on. Bitcoin’s price more than doubled in that time. So, even though the *percentage* is lower, the *dollar value* of Bitcoin on exchanges is actually higher. Other analysts point out something else. They say maybe the Bitcoin didn’t disappear. Maybe it just moved to places like Coinbase, which holds Bitcoin for the ETFs. They argue these places are kind of like exchanges themselves. When you add up Bitcoin on regular exchanges and with these ETF holders, the total hasn’t changed much this year.
So, there’s a bit of a debate there. Is less Bitcoin on exchanges a sign of selling drying up? Or just Bitcoin moving house?
Looking ahead, the Bernstein analysts have some price ideas. They think Bitcoin could hit around $200,000 by the end of 2025. Then maybe $500,000 by the end of 2029. And even $1 million by the end of 2033. They expect the price to drop sometimes along the way, maybe for a year or so, like it has before.
For the long haul, they believe Bitcoin’s value comes down to two things. How much people want it (demand) and how little of it there is (supply). There will only ever be 21 million Bitcoins. Ever. About 19.9 million have been created, or “mined,” already. Of the 1.1 million left, almost all of it will be mined in the next 10 years. After that, it gets really slow.
With more and more people and companies wanting Bitcoin, and a fixed, known amount of it coming out slowly, the analysts find it hard to feel negative about this asset. The simple math of demand and supply looks good for Bitcoin, in their view.
