21Shares sees Bitcoin hit $138.5K by year-end

Bitcoin (BTC) is on the verge of a potential breakout, and 21Shares forecasts it could reach $138,500* by year-end. Unlike previous bull runs fueled by retail mania, this rally is rooted in powerful long-term forces: deep-pocketed institutional inflows, favorable macro trends, and an unprecedented supply crunch. The recent truce in the US-China trade war has added fresh momentum, propelling Bitcoin closer to its all-time high. With these structural drivers firmly in place, 21Shares believes the conditions are ripe for Bitcoin to reach $138.5K by the end of 2025.

A new era of institutional demand and supply shock

Bitcoin’s current bull run signals a fundamental shift in demand and supply dynamics. Institutional capital is now at the forefront, with spot Bitcoin exchange-traded funds (ETFs) acting as steady daily buyers and their inflows consistently surpassing the 450 BTC mined each day. This growing imbalance is depleting the available supply at an accelerating rate, reshaping the market and reinforcing Bitcoin’s upward momentum.

^{Source: Bitcoin Treasuries, Glassnode}

Beyond ETFs, some institutions are also turning to companies like Michael Saylor’s Strategy and the soon-to-launch Twenty One Capital to gain exposure to Bitcoin. Public companies are also beginning to hold BTC on their balance sheets, further cementing its role as a strategic reserve asset. On a broader scale, sovereign and state actors are stepping in: states such as New Hampshire and Arizona have introduced laws to establish state-level Bitcoin reserves, while Abu Dhabi’s sovereign wealth fund is reportedly building its own Bitcoin position.

Macro tailwinds and the rebound in liquidity

Bitcoin's growth potential in this cycle is connected to a significantly improving macroeconomic environment, as central banks are shifting course after two years of monetary tightening. The US Federal Reserve is widely anticipated to reduce interest rates by the end of the year. Real yields are decreasing, and the US dollar is weakening. At the same time, global liquidity is increasing as the balance sheets of the European Central Bank, the Bank of Japan, and the People's Bank of China are expanding once again.

Easing US-China trade tensions are adding to the momentum, lifting a major geopolitical weight off markets. As the world’s two largest economies signal a thaw, investor confidence is rising, reflected in climbing equity markets and tightening credit spreads. Together, these developments create a fertile backdrop for assets like Bitcoin, particularly as investors position for a soft-landing scenario in the global economy.

Bitcoin often reacts to changes in the US liquid money supply (known as M2) about 12 weeks later, and that pattern is happening again now as M2 starts to rise. It also tends to follow the ISM Manufacturing Index, a key indicator of the economy’s health, which is beginning to recover. Together, these trends show that Bitcoin is once again acting like a hedge against economic shifts, especially because its supply is limited.

Historical context and behavioral patterns

In the past, Bitcoin’s biggest price jumps have usually happened 6 to 12 months after a halving event. For example, in 2017 and 2020, major rallies were driven by strong forces like retail hype and easy money policies. This time, we might not see Bitcoin grow 10 times like before, but doubling or even tripling from its previous $69,000 high is very possible based on past patterns.

What makes this cycle different is how the money is flowing in. Retail excitement is growing, but it’s still pretty calm, not the frenzy we’ve seen in past bull runs. Instead, most of the capital is coming from institutions like wirehouses, registered investment advisors (RIAs), and corporate balance sheet investors. This points to a broader and more stable foundation of demand.

The road to $138.5K

Taken together, the case for Bitcoin reaching $138.5K by year-end is growing stronger. Supply is tight, institutional demand is unprecedented, and macro conditions are increasingly favorable. ETF inflows alone are outpacing new supply, and if more US states or sovereign wealth funds follow the early adopters, both narrative momentum and capital could accelerate.

A move to $138.5K would provide around a 35% return from current levels, more modest than previous cycles but consistent with post-halving trends. With fewer sellers, deeper-pocketed buyers, and expanding global liquidity, Bitcoin appears poised for a breakout year.

^{*The price projection mentioned reflects the views or analysis of 21Shares and is not a guarantee of future performance. Cryptocurrency investments are highly volatile and involve risk. This is not financial or investment advice. Investors should conduct their own research or consult with a financial advisor before making investment decisions.}

‍