In a newly published investor note, H.C. Wainwright & Co., one of the oldest investment banks in the United States, predicts a significant increase in Bitcoin's value. The bank, founded in 1868, has updated its Bitcoin price target for the end of 2025, moving it from $145,000 to an ambitious $225,000. This expectation is based on a blend of historical trends, macroeconomic indicators, and evolving regulatory and institutional factors.
According to H.C. Wainwright, Bitcoin is predicted to hit a peak of $225,000 by the close of 2025. This projection considers market cycles and the potential for a more favorable regulatory environment for digital assets in the U.S. under a new administration.
Several key factors will drive Bitcoin's growth, according to the bank's analysis. The anticipated wider availability of spot Bitcoin exchange-traded funds (ETFs) in the U.S. could draw new institutional capital. Additionally, the bank points to an "accelerating institutional investor and corporate adoption" as a significant influence on its positive forecast.
Further boosting confidence is an expected alignment of global liquidity with improving market conditions.
The assumption is that regulatory hurdles will diminish, though the forecast is sensitive to macroeconomic conditions like M2 money supply trends, which have declined since October. However, the path to $225,000 is fraught with expected volatility. "20-30% drawdowns during bull markets are not uncommon," the bank warns, estimating Bitcoin could fall to around $75,000 in early Q1 2025 before climbing again.
If Bitcoin attains the $225,000 mark, H.C. Wainwright foresees a total market capitalization for Bitcoin of about $4.5 trillion—approximately 25% of gold's current $18 trillion market cap. This represents a 113% increase over today’s levels. Intriguingly, the note mentions an unaccounted scenario: the U.S. government potentially adopting Bitcoin as a treasury reserve asset, which could see prices soar beyond current predictions.
The bank’s analysis also touches on the broader cryptocurrency market. Historically, Bitcoin's market dominance dips during market peaks, dropping to around 40% during the last bull cycle peak in November 2021. Looking ahead, H.C. Wainwright expects this dominance to decline to 45% by the end of 2025, down from about 56% currently. This decline correlates with a projected growth in the total crypto market from $3.6 trillion to approximately $10 trillion by the end of 2025.
Publicly traded Bitcoin mining companies under H.C. Wainwright’s coverage could benefit significantly from the expected price increase. "If our predictions are accurate," the bank notes, "we could see substantial upward revisions in estimates for our coverage universe in the coming year." Currently, Bitcoin trades at $96,221.