Bitcoin Down 50%, But Bernstein Says the Real Rally Is Still Ahead

Bitcoin’s recent downturn has not shaken long-term bullish projections from Wall Street analysts, with research firm Bernstein reiterating its $150,000 price target for the asset despite a steep correction from its record highs.

In a note to investors on Monday, analysts led by Gautam Chhugani described the current pullback as the “weakest bear case” in Bitcoin’s history. 

They argued that the decline is being driven primarily by investor sentiment and macroeconomic conditions rather than any fundamental breakdown in the crypto market’s infrastructure.

According to the report, the sell-off has not been accompanied by major failures across exchanges, custodians, or other core components of Bitcoin’s ecosystem. The analysts highlighted that spot BTC exchange-traded funds have recorded only about 7% in net outflows even as the price dropped roughly 50% from its peak, a relatively modest reaction compared with previous downturns.

“The current Bitcoin price action is a mere crisis of confidence,” the analysts wrote, emphasizing that there have been no structural shocks or hidden risks surfacing during the decline.

Liquidity Pressures Weigh on Bitcoin

Bernstein attributed the crypto’s recent underperformance relative to gold to its continued classification as a risk-sensitive asset rather than a defensive store of value. In an environment of higher interest rates and tight liquidity, capital has largely flowed into sectors such as artificial intelligence-linked equities and traditional safe-haven assets.

This dynamic, the analysts said, has limited Bitcoin’s short-term upside despite continued institutional adoption and broader integration into the financial system.

The report also dismissed several emerging bearish narratives circulating in the market. Among them were concerns that artificial intelligence investment is siphoning capital away from crypto and that advances in quantum computing could eventually threaten Bitcoin’s cryptographic security.

Bernstein argued that fears around quantum computing overlook both the long timeline for practical quantum attacks and the fact that any such threat would impact the entire digital economy, not just Bitcoin. The firm added that the technology sector would likely transition to quantum-resistant systems collectively if the threat became realistic.

Corporate Leverage and Miner Pressures

The analysts also addressed concerns about leverage among large corporate Bitcoin holders, including companies that have accumulated significant BTC positions on their balance sheets. They pointed to firms such as Strategy, noting that its financing structure relies heavily on long-dated preferred equity rather than near-term debt obligations.

According to Bernstein, that structure reduces refinancing risk and gives the company sufficient liquidity to meet dividend obligations without being forced to sell Bitcoin in the near term.

However, the report did acknowledge that Bitcoin miners could face increasing pressure if prices remain below their production costs. In such scenarios, some miners may be forced to sell holdings or shut down operations, potentially contributing to short-term market volatility.

Despite those challenges, Bernstein expects Bitcoin to eventually resume its upward trajectory as financial conditions ease. The firm maintained its forecast that the cryptocurrency could reach $150,000 by 2026.

Institutions See Opportunity, Traders Stay Cautious

Views across the market remain divided. 

Bitwise CEO Hunter Horsley said last week that institutional investors are treating Bitcoin’s drop below $70,000 as a fresh entry point, even as long-time holders grow more cautious.

Speaking on CNBC, Horsley said many institutions are revisiting price levels they previously felt they had missed. He attributed the downturn primarily to macroeconomic pressures, noting that Bitcoin has been trading in line with other liquid assets as investors move to reduce exposure across markets.

At the same time, several technical analysts have warned that the correction may not be over. Independent traders pointed to indicators suggesting further downside could be possible, with some market participants arguing that a more definitive bottom might not form until Bitcoin falls below the $50,000 level.

That’s after BTC reached an all-time high above $126,000 in early October, but has since retraced sharply. 

Bitcoin price (Source: CoinGecko)

At the time of writing, the cryptocurrency was trading near $69,400, according to CoinGecko data, as the market continues to balance macroeconomic pressures with long-term institutional optimism.