Why these analysts say bitcoin will double by next year - and could reach $500,000 by the end of the decade

By Barbara KollmeyerBernstein sees bitcoin as a leading 'hard asset' in the so-called debasement tradeBernstein analysts say bitcoin could reach $300,000 or even $500,000 by the end of 2029.Bitcoin stirred to life last week as a bond rout revived talk of the debasement trade.That trade is based on the view that investors will turn to alternative assets like gold (or cryptocurrencies) amid worries that stubborn government deficits and inflation will debase currencies like the dollar.Our call of the day from Bernstein analysts forecasts bitcoin (BTCUSD) will reach its next peak of $300,000 by the end of 2029 - and the analysts' most bullish case puts that target at $500,000. They expect the cryptocurrency to recover to a new all-time high of $150,000 by mid-2027, versus a current price that's just under $80,000.A team of analysts led by Gautam Chhugani told clients in a note on Wednesday that bitcoin will benefit as a 40-year falling-interest-rates trend ends and governments are saddled with higher debt-servicing costs and unprecedented sovereign debt levels. Rising bond yields are only adding to government problems with rising interest expenses and increasing borrowing needs, they added."While governments are already using measures to manage bond markets and contain yield pressures, these interventions only address symptoms rather than the underlying debt burden," said Chhugani and his Bernstein team. Given a choice between fiscal stress and currency debasement, they expect the latter, and less politically disruptive, option will be favored."Hence, investors will potentially benefit from owning scarce assets such as bitcoin that cannot be easily created/diluted," the Bernstein analysts said.Bitcoin, according to the analysts, is in a strong position to become a leading "hard asset" in part due to its committed investor base. The cryptocurrency pulled back 50% from its October 2025 peak, but 60% of holders haven't budged in the last 12 months, the analysts said. Increased institutional and retail access, and a favorable regulatory environment, will also drive more interest in bitcoin, the Bernstein team added.The analysts laid out an "an accelerated bull case" for bitcoin, driven by macro tailwinds in which institutional capital could start actively chasing the crypto asset. Under that scenario, bitcoin could peak at $500,000 by 2029, following a rapid recovery to all-time highs near $200,000 by mid-2027. Bernstein is sticking to a forecast $1 million bitcoin price by 2033.The analysts explained that bitcoin operates in four-year cycles: breakout, hype, correction and accumulate. Their base case is based on this four-stage cycle, which, they said, is tracking so far.How did Bernstein come up with its valuation forecast? The analysts define price as a multiple of marginal cost - the cost of the least efficient miner - over the last two cycles, from 2016 to 2019 and 2020 to 2023. The peak of $125,000 in October 2025 was at a cycle high of 1.4 times marginal cost.The base case holds that the 2029 peak of $300,000 will be reached with a multiple of 1.25 marginal cost, and the $1 million 2033 peak via a multiple of 1.2.Their bull case would see that marginal cost expand to a multiple of 2 due to currency debasement and capital flow into hard assets. This optimistic analysis suggests a bitcoin recovery to the previous all-time high of $125,000 by the end of 2026, $200,000 by mid-2027 and a higher peak of $500,000 by 2029.Bernstein also updated its forecast for Strategy (MSTR), the largest corporate holder of bitcoin. The analysts maintained an outperform rating on the stock but lowered their share-price target to $350 from $450 per share.If bitcoin's strength continues and Strategy's preferred shares (STRC) recover to a face value of $100, then Strategy could go "kinetic again with bitcoin purchases," said Chhugani and his team. That bitcoin buying could help drive a 30% premium for Strategy above the cash value of its bitcoin holdings by June 2027, they said.The marketsU.S. stock-index futures (ES00) (YM00) (NQ00) are mostly higher, led by tech, as investors cheer Nvidia's quarterly results and forecast. Longer-term Treasury yields BX:TMUBMUSD30Y BX:TMUBMUSD10Y are edging up, and oil prices (CL.1) are flat. Key asset performance Last 5d 1m YTD 1y S&P 500 7675.7 -0.42% 4.91% 12.13% 18.43% Nasdaq Composite 26,130.20 -0.76% 6.90% 12.43% 21.03% 10-year Treasury 4.673 -3.30 -0.40 50.10 46.40 Gold 4636.3 1.34% 11.37% 7.02% 33.35% Oil 82 -4.88% -2.33% 42.83% 27.49% Data: MarketWatch. Treasury yields change expressed in basis points The buzzNvidia's stock (NVDA) is up 7% after the AI chip giant posted strong earnings and an upbeat revenue forecast. Micron's stock (MU) is up 4%. Separately, Nvidia reportedly agreed to buy open-source AI hub Hugging Face.Salesforce's stock (CRM) is jumping after the enterprise-software giant posted an earnings beat fueled by demand for its agentic-AI tools.CrowdStrike shares (CRWD) are also surging after the cybersecurity group's record-breaking quarter.HP (HPQ) reported higher revenue but lower unit-sales volume for its PC business, and it said memory costs are still an issue. The stock is lower.A pair of discount retailers reported, with Dollar Tree (DLTR) posted upbeat results, but disappointing guidance and shares are down. Dollar General (DG) stock is up after lifting earnings guidance.Marvell (MRVL) and Autodesk (ADSK) will report after the close.Weekly jobless claims are due at 8:30 a.m., along with the trade deficit for July. The Kansas City Fed's Jackson Hole symposium kicks off, with Chairman Kevin Warsh's keynote speech set for Friday.Think Treasurys are having a rough summer? It's even uglier abroad.Top tickersThese were the most searched ticker symbols on MarketWatch as of 6 a.m.: Ticker symbol Security name NVDA Nvidia MU Micron SPCX SpaceX TSLA Tesla AMZN Amazon TSM Taiwan Semiconductor Manufacturing AMD Advanced Micro Devices AAPL Apple META Meta SNDK Sandisk -Barbara KollmeyerThis content was created by MarketWatch, which is operated by Dow Jones & Co. 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