Bernstein: The decline in Bitcoin may be a short-term correction.

Recently, the fluctuations in Bitcoin prices continue to attract the attention of investors. One of the prominent analyses was conducted by the research firm Bernstein. Analysts revealed that the approximately 25% drop in Bitcoin since it reached around $126,000 in October is a short-term correction rather than a fundamental deterioration.

According to the Bernstein team's statements, the main reason behind the market sell-offs is that the peaks of the past four-year cycles typically occur in the fourth quarter. Investors expecting a similar situation this year led to early sell-offs. However, it is emphasized that there are strong fundamental dynamics supporting the current environment. It is noted that approximately 340,000 Bitcoin sold by investors who held for at least a year in the last six months was absorbed by new capital of around $34 billion directed towards spot exchange-traded funds (ETFs) and corporate treasuries.

On the institutional investment side, the ownership rate of Bitcoin exchange-traded funds (ETFs) has risen from 20% to 28%, and the total managed assets have reached $125 billion, indicating that the market is on its way towards a more quality and stable ownership structure. Bernstein argues that this situation does not pose a significant risk of deep selling. Moreover, the possibility of growing corporate assets such as Strategy (formerly MicroStrategy) making sales is also considered unrealistic by analysts.

Bernstein highlighted the company’s management statement, “we have no plan to sell a single Bitcoin” and emphasized that Strategy has a solid balance sheet with $61 billion in Bitcoin assets and $8 billion in debt.

There are comments suggesting that political and corporate trends also support the market. Analysts indicate that the crypto-friendly policies of the Trump administration, the likelihood of regulations progressing towards 2025, and improving liquidity conditions combined with falling interest rates provide additional support to the sector. Furthermore, the performances of firms like Coinbase, Robinhood, Figure, and Circle in the third quarter reveal that tokenization and stablecoins stand out as the two mega trends of this cycle.

Bernstein states that the current environment offers mild corrections within a multi-year trend where corporate participation is strengthening rather than a cycle peak, and they are carefully monitoring whether Bitcoin will establish a bottom at the $80,000 level seen after last year’s US elections. It is also emphasized that this decline could create attractive buying opportunities for broader digital assets.