"In our base case, we expect Bitcoin to reach a new all-time high of $150,000 by mid-2027 and $300,000 by the end of 2029. However, given the shift in the macro regime, if institutional capital begins actively buying Bitcoin, the timeline could accelerate: Bitcoin could potentially peak at $500,000 in 2029, and quickly recover to new highs of around $200,000 by mid-2027. We maintain our Bitcoin price forecast of around $1,000,000 by the end of 2033 in both the baseline and bullish scenarios," Chhugani wrote in a note on Wednesday.

Bitcoin is ending August with a powerful price surge. On Tuesday, Bitcoin broke through $80,000 for the first time in 15 weeks, peaking at $81,231. Today, the price is trading around $78,500 (at the time of writing). Bitcoin has gained 25% over the past 10 days.

The latest rally was primarily driven by movements in the bond market. The US Treasury Department surprised financial markets last week by announcing it would double the maximum size of its long-term bond purchases, from $2 billion to $4 billion per session. This intervention directly targets the 10-, 20-, and 30-year Treasury bond segments after benchmark yields soared to 20-year highs due to persistent inflation and war-induced pressure on energy prices.

Treasury Secretary Scott Bessent stated that he has a "large toolbox" to further counter the rise in bond yields.

By tapping the secondary market to purchase debt, the Treasury aims to inject liquidity, stabilize falling bond prices, and reduce rising borrowing costs for consumers and businesses.

Bessent's promise to deploy his extensive toolbox appears to have only emboldened Bitcoin bulls, who are expecting more liquidity, which they typically reward with rising digital asset prices. Chhugani believes the bond buyback scheme sheds light on what could eventually become a powerful driver of Bitcoin prices.

"The 40-year era of declining interest rates appears to be over, exposing governments to rising debt servicing costs as sovereign debt levels reach unprecedented levels. Rising yields create a self-reinforcing cycle of higher interest costs, larger budget deficits, and growing borrowing needs, making debt sustainability a growing challenge for policymakers. While governments are already using measures to manage bond markets and contain yield pressure, these interventions only address the symptoms, not the debt burden itself. Given the choice between fiscal stress and currency depreciation, we believe policymakers will ultimately choose the latter, as it is politically less painful (e.g., the recent difficulties with the DOGE effort). Therefore, investors will potentially benefit from owning scarce assets like Bitcoin, which cannot be easily created or diluted,” Chhugani said.