Investing.com -- Compass Point Research has initiated coverage on digital assets with a bullish outlook on Bitcoin , forecasting BTC/USD to reach $160,000 by the end of 2025.

Analysts cite increasing institutional adoption, Bitcoin’s scarcity, and its role as a "neutral" asset amid global economic uncertainty as key drivers of price appreciation.

“Bitcoin is maturing into an institutional asset, with a $2 trillion market cap and ~$50bn daily trading volume,” Compass Point wrote.

Despite its growing size, analysts note that “BTC gets limited Wall Street coverage,” even as Bitcoin ETF assets under management have climbed to $130 billion.

The firm says Bitcoin’s decentralized and “permissionless” network is a central pillar of its value, allowing transactions without reliance on traditional financial intermediaries.

“In a digitized modern world, banks and payments companies determine most transaction flows. Bitcoin provides an alternative system without trusted intermediaries,” analysts wrote.

Drawing parallels to gold, Compass Point highlights Bitcoin’s scarcity advantage, with a fixed supply cap of 21 million coins and an inflation rate of less than 1%, compared to gold’s 2% annual supply growth.

“Bitcoin's $2T market cap is currently 11% of Gold's $19T. We see this ratio increasing while both assets benefit from monetary debasement,” the firm added.

Compass Point believes institutions will drive Bitcoin’s next leg of growth. “Retail ownership rates already exceed 10% in most developed countries while institutions remain underweight,” analysts noted.

They add that major asset managers like BlackRock (NYSE: BLK ) are recommending 1-2% Bitcoin allocations, which Compass Point estimates could push BTC prices “between $150k to $300k if achieved.”

While Bitcoin has yet to reach peak market euphoria, analysts suggest the current cycle is in its "7th inning," with institutional demand expected to be the dominant force in BTC’s next phase of growth.