Bernstein on Monday outlined bold predictions for the cryptocurrency market in 2025, emphasizing Bitcoin's (CRYPTO: BTC) growth, regulatory changes and the convergence of crypto with AI technologies.

Bernstein's 2025 Bitcoin Target

According to the report, Bitcoin is poised to reach $200,000 by the end of 2025, driven by rising institutional demand and its limited supply.

"Bitcoin's price trajectory reflects increased corporate treasuries and ETF holdings, making it a cornerstone of the financial future," it stated.

The report also highlights an anticipated surge in corporate Bitcoin investments, predicting treasury allocations will double to exceed $50 billion, up from $24 billion in 2024.

This trend is led by industry pioneers such as MicroStrategy (NASDAQ:MSTR), which continues to increase its holdings.

"MicroStrategy remains the flagbearer, tapping new capital markets and significantly expanding Bitcoin reserves," Bernstein analysts noted.

Bitcoin ETFs To Continue Buying

The expansion of Bitcoin ETFs is another key driver of growth, with net inflows expected to surpass $70 billion, doubling the $35 billion recorded in 2024.

Bernstein emphasized that ETF growth demonstrates rising institutional confidence in Bitcoin as a diversified investment vehicle.

Bitcoin Mining Meets AI Data Centers

The research predicts a transformative shift for Bitcoin miners, who are expected to allocate increasing power capacity toward AI data centers.

This move is seen as both a sustainability strategy and a method to broaden institutional appeal.

"This shift ensures sustainability and a broader institutional appeal," the report stated.

The convergence of cryptocurrency and artificial intelligence is set to redefine both sectors.

Bernstein envisions AI-enabled crypto functionalities driving innovation, from autonomous agents to decentralized markets for AI services.

"The convergence of crypto and AI will redefine both industries," the report stated.

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Stablecoin Regulation Coming

Bernstein foresees significant regulatory changes, including stablecoin legislation and clarified crypto market structures, which could position the United States as a leader in crypto innovation.

The stablecoin market is projected to cross $500 billion in circulation by 2025, bolstered by regulatory clarity and its utility in cross-border business payments.

"Regulatory clarity will drive stablecoin adoption in cross-border B2B payments," Bernstein predicted.

The report also anticipates a wave of crypto IPOs and the tokenization of equity markets as the SEC adopts a pro-crypto stance.

Analysts believe this shift will enable private crypto firms to enter public markets, marking a pivotal moment for the industry.

"This marks a turning point for private crypto firms entering public markets," the report stated.

TradFi Interest Could Fuel Ethereum Spike

Traditional financial institutions are also expected to introduce new trading, custody and active asset management products, further integrating crypto into traditional markets.

Bernstein's report predicts that Ethereum (CRYPTO: BTC) will regain institutional favor due to its deflationary model and utility-driven demand, positioning it as the second-most valued blockchain.

"Ethereum's unique use cases and staking yields will make it a favorite for traditional investors," the analysts noted.