Bernstein sees bitcoin primed for new highs as corporate accumulation and ETF ‘supply squeeze’ intensifies

The bitcoin price narrative has fluctuated between being correlated to gold or the Nasdaq at various points this year, but analysts at research and brokerage firm Bernstein argue short term correlations are misleading and that retail selling exhaustion, the expanding corporate accumulation race and returning exchange-traded fund inflows are better indicators — suggesting a “supply squeeze” could see bitcoin heading for new highs.

Last week, SoftBank, Tether, Bitfinex and Cantor Fitzgerald unveiled a new bitcoin corporate treasury venture called Twenty One Capital, with an anticipated starting position of 42,000 BTC. Twenty One will be funded by $900 million from SoftBank, $1.5 billion from Tether and $600 million from Bitfinex. It plans to merge with Cantor Equity Partners through a SPAC and raise another $585 million at closing — $385 million in convertibles and $200 million in equity, the analysts led by Gautam Chhugani said in a Monday note to clients.

“Twenty One aims to replicate Strategy’s Bitcoin playbook, albeit from a lower capital base,” Bernstein said. While Strategy has built a capital flywheel, raising around $22 billion in 2024 and $8.6 billion so far in 2025 across various financial instruments, Twenty One’s advantage is its backers, with Tether alone earning $13 billion in 2024 from its $148 billion USDT supply, the analysts argued. “Regardless, the bitcoin accumulation game is becoming competitive,” they added, noting that approximately 80 companies now hold a combined 700,000 BTC or 3.4% of bitcoin’s total 21 million supply.

Bitcoin held by corporations. Image: Bernstein.

After around two months of flattish flows following bitcoin’s 31% decline from its Inauguration Day all-time high above $109,000 to a low just below $75,000 earlier this month, U.S. spot Bitcoin ETF net inflows are also now positive again for the year after adding over $3 billion last week — the highest recorded in five months and the second-highest of all time, Chhugani noted. Bitcoin is currently trading for around $95,295, according to The Block’s Bitcoin price page.

The bitcoin held by ETFs stands at over 5.5% of the total supply, equivalent to around $110 billion in assets under management. Almost 33% of the ETF AUM is held by institutional investors — up from around 20% in September — with 48% of that held by investment advisors, likely indicating portfolio allocations, compared to 31% held by hedge funds, potentially for basis trade positions, the analysts said.

Ownership of spot Bitcoin ETFs. Image: Bernstein.

In combination, all Bitcoin ETFs and corporate treasuries now account for almost 9% of the total bitcoin supply, the analysts noted — up sevenfold since the ETFs launched in January 2024.

Meanwhile, President Trump’s recent executive order to establish a U.S. Strategic Bitcoin Reserve could accelerate sovereign adoption beyond institutions and corporations, Chhugani said. “In our view, the current momentum driven by corporations/institutions is strong enough to push bitcoin to new highs in 2025. However, a significant bitcoin purchase by the U.S government is definitely not priced in, and it would trigger a global shift in competitive bitcoin accumulation amongst sovereign nation states.”

Debating the value of bitcoin balances on exchanges

Bernstein also argued that bitcoin balances on exchanges declining to 13% of total supply from 16% at the end of 2023 is also an indicator of a potential supply squeeze. However, with bitcoin’s substantial price rise, more than doubling over that period, the balance remains higher in dollar terms. Other analysts also argue that this simply represents a shift of assets held on exchanges to ETF custodians like Coinbase, suggesting they can be seen as another form of exchange platform and that their combined balances have remained largely flat for most of this cycle.

The Bernstein analysts estimate bitcoin to reach a cycle peak of around $200,000 by the end of 2025, $500,000 by the end of 2029 and $1 million by the end of 2033, with intermittent one-year bear markets.

“Long term, we believe bitcoin fundamentals are being driven by its own demand trajectory and its mathematically proven immutable supply of 21 million coins. Bitcoin mined today stands at 19.9 million and of the remaining 1.1 million to be mined, almost 95% will be mined over the next 10 years,” they said. “Hard to be bearish, in our view, on this asset with the current demand-supply dynamics.”

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