Bitcoin at $500,000? Analysts weigh in as cryptocurrency hits all-time high again

23/05/2025 01:49 AST

Bitcoin hit a new all-time high again on Thursday, and a leading international bank suggested that it could reach $500,000 by 2029.

The world's largest cryptocurrency climbed as high as $111,862.98, a fresh all-time peak partly as investors sought out alternatives to US assets. This marked 3.3 per cent increase from Wednesday's close, according to Reuters data.

Bitcoin enthusiasts celebrated Bitcoin Pizza Day with a banger. The milestone comes as the crypto community cherishes the anniversary of the first real-world Bitcoin transaction.

Analysts suggest this could just be the start of something far greater.

Geoff Kendrick, Head of Digital Assets at Standard Chartered, published a projection on Tuesday saying that Bitcoin could reach $500,000 by 2029. Kendrick points to growing institutional and government interest, especially via indirect exposure through vehicles like MicroStrategy: "The quarterly 13F data (which gauges future demand for Bitcoin from institutions) is the best test of our thesis that BTC will attract new institutional buyer types as the market matures, helping the price reach our $500,000 target level," Kendrick said.

Simon Peters, Market Analyst at eToro, says there are a number of narratives stewing that could cause the bitcoin price to explode.

Firstly, global liquidity - essentially how much money is available in the global economy and a metric which the bitcoin price closely mirrors - is forecast to increase throughout the year. "With the recent downgrade of the US credit rating, and the amount of debt that it needs to be refinanced this year, it will be interesting to see what demand is now like for newly issued Treasuries," Peters said.

A failure at auction, as in not enough buyers, could mean the Fed has to intervene, provide the cash for these bonds and increase its balance sheet. Historically the price of bitcoin has been seen to rise in line with a growing Fed balance sheet. "Other developed countries such as China, UK, Europe, Australia are lowering interest rates and loosening financial conditions which we've historically seen bode well for crypto asset prices," Peters said.

Secondly, a vast number of buyers and increased amounts of capital are all chasing a fixed supply. As well as individual investors, more publicly traded companies are adopting bitcoin treasury strategies, buying billions of dollars' worth at a time.

Pension and sovereign wealth funds are also increasing their exposure to bitcoin through spot ETFs and in turn hoovering up more of the available supply.

Where the price tops out this bull market remains to be seen. "What is evident is that if bitcoin is really to be the global reserve currency or asset then its market capitalisation (and in turn price) should be far higher than the $2.2 trillion that we are currently at today," Peters said.

Analysts say the cryptocurrency's increasing popularity is steadily ensuring its status as a safe-haven asset.

The Bitcoin rally to record highs comes in the midst of tectonic moves that are shuffling how traditional assets are perceived by financial markets.

US Treasury yields are on the rise, with the 30-year Treasury bond yield briefly surpassing five per cent this week as Moody's downgraded the US sovereign debt rating and the US Congress is debating a new tax bill that could shed billions in taxes and add them to the government deficit.

The correlation between Bitcoin price and the US stock markets is also on the decline. While Bitcoin was making new all-time highs, the S&P 500 lost 1.61 per cent on Wednesday. Bitcoin has decisively outperformed major US equities in 2025. The biggest cryptocurrency is currently up 18 per cent year-to-date, while the S&P 500 closed trading on Wednesday at 5844.61, 0.41 per cent short of its opening levels for 2025.

"Institutional and retail investors are increasingly viewing Bitcoin as a portfolio diversifier and a hedge against macroeconomic uncertainty," FXStreet strategist Jordi Martínez wrote.

Khaleej Times