Bitcoin’s recovery is being reframed as the start of a broader bull-market reset. Bernstein analysts expect bitcoin to hit $150,000 by mid-2027 and around $300,000 at the next cycle peak in 2029, according to a Wednesday note. They argue the 40-year era of falling interest rates is over, with U.S. sovereign debt at $40 trillion and rising yields creating "a self-reinforcing cycle of higher interest expenses, larger fiscal deficits, and increased borrowing needs."
Bernstein says policymakers will ultimately favor currency debasement over fiscal stress, boosting scarce assets such as bitcoin. The trend is already visible in ETF trading: Bloomberg Senior ETF Analyst Eric Balchunas said the "debasement trade is starting to replace AI mania," with BlackRock's IBIT and SPDR's gold ETF GLD returning to the top 10 most-traded ETFs. Bernstein also cited bitcoin's holder base, wider institutional access, and a more favorable regulatory climate. Around 59% of bitcoin supply has not moved in 12 months, and the cryptocurrency gained 28% over 10 days after a roughly 50% drawdown since October 2025.
In an accelerated scenario, Bernstein says bitcoin could reach $200,000 by mid-2027 and $500,000 in 2029 if institutional capital chases the debasement trade more aggressively. The firm kept its long-term forecast of about $1 million by end-2033. It also maintained an Outperform rating on Strategy but cut the price target to $350 from $450, citing an updated bitcoin cycle outlook and accelerated equity dilution. Strategy holds 840,447 BTC, or about 4% of total supply, with roughly 3.9 years of cash coverage for interest and preferred dividends.
Separately, K33 Head of Research Vetle Lunde said bitcoin’s historic short squeeze may be a bottoming signal. Bitcoin rose 23% over the past week, its strongest weekly return since November 2024. Spot and perpetual futures volumes jumped 188%, CME volumes rose 152%, and the annualized CME futures basis hit 11.1%, the highest since January 2025. Bitcoin exchange-traded products recorded net inflows of 31,740 BTC, the strongest since October 2025 highs.
Much of the initial move was forced buying. A record $1.37 billion in bitcoin shorts were liquidated on Aug. 19, nearly double the prior daily record of $757 million from July 2021, followed by another $739 million on Aug. 21. Open interest fell to 284,000 BTC, the lowest since May, while funding rates returned to neutral. Lunde noted that bitcoin’s six-month 25-delta options skew turned negative for the first time since September 2025, meaning calls are more expensive than puts, and bitcoin reclaimed its 50-day, 100-day, 200-day and 200-week moving averages in only four days.
The rally also followed a macro shift. Lunde said Treasury Secretary Scott Bessent’s push to increase Treasury buybacks of long-term bonds signaled intervention and helped demand for scarce assets, with the Treasury potentially using the nearly $1 trillion Treasury General Account. Bitcoin’s 90-day correlation to gold rose to 0.52, the highest since October 2020, while its Nasdaq correlation fell to 0.38, a one-year low. Bitwise CIO Matt Hougan highlighted Bessent’s announcement of an "economic onslaught" against Iran’s global financial connections, arguing that both developments reinforce bitcoin’s scarcity and its role as a neutral, globally transferable monetary network. Bitcoin remains about 36% below its all-time high.
