Bernstein targets $500,000 Bitcoin by 2029 as debasement trade builds

Bernstein set a $500,000 bull-case Bitcoin price target for 2029 and cut Strategy Inc. (NASDAQ: MSTR) to $350, citing the end of the falling-rate era.

"Faced with the choice between fiscal stress and currency debasement, we believe policymakers will ultimately favor the latter," Gautam Chhugani, senior digital assets analyst at Bernstein, said in a client note Wednesday.

The base case projects Bitcoin at $125,000 by end of 2026, $150,000 by mid-2027, and $300,000 by 2029. The bull case accelerates to $200,000 by mid-2027 and $500,000 by 2029. Bernstein maintained its $1 million long-term forecast for 2033.

The forecast arrives as Bitcoin trades near $78,000 after briefly breaking above $81,000, up 25 percent in 10 days. The U.S. Treasury's decision to double its long-term bond buyback program to $4 billion per session has injected liquidity into markets, with Treasury Secretary Scott Bessent pledging a "big toolkit" to manage yields.

Debasement Trade Drives the Forecast

Chhugani argued that the 40-year era of declining interest rates has ended, exposing governments to mounting debt-servicing costs as sovereign debt reaches unprecedented levels. U.S. sovereign debt now stands at $40 trillion, and rising interest expenses create a self-reinforcing cycle of higher deficits and increased borrowing needs.

"Rising yields create a self-reinforcing cycle of higher interest expenses, larger fiscal deficits, and increased borrowing needs, making debt sustainability a growing policy challenge," Chhugani said. "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."

The analysts expect fixed-supply assets such as Bitcoin to become increasingly attractive as policymakers tolerate higher inflation rather than pursue fiscal austerity. Bernstein identified growing institutional ownership as a key driver of the forecast. Spot Bitcoin exchange-traded funds and corporate treasury buyers have created a more stable holder base, with ETF outflows during recent corrections remaining below 5 percent. Long-term holders who have not moved their Bitcoin for more than one year now control about 60 percent of the circulating supply.

Strategy, formerly MicroStrategy, has continued accumulating Bitcoin throughout the downturn, providing a source of demand during periods of market weakness. The MSTR price target cut to $350 reflects accelerated equity dilution from the company's ongoing Bitcoin purchases.

Despite Bitcoin's roughly 50 percent decline from its October 2025 peak of about $126,000, Bernstein maintained that the asset's scarcity thesis remains intact. The current downturn has been significantly milder than previous Bitcoin bear markets, which typically saw declines of 75 to 90 percent. Bernstein also addressed quantum-computing concerns, describing the threat as manageable and estimating that the Bitcoin industry has a three-to-five-year window to implement post-quantum security upgrades.

The implications extend beyond Bitcoin itself. If Bernstein's debasement thesis plays out, the dollar's purchasing power erodes while scarce assets appreciate, a dynamic that would also benefit gold and other hard assets. For equity investors, the MSTR target cut highlights the tension between Bitcoin exposure and dilution risk in corporate treasury strategies.

This article is for informational purposes only and does not constitute investment advice.