Analysts at Bernstein said the current bitcoin downturn reflects a crisis of confidence rather than structural weakness, describing it as the “weakest bear case” in the asset’s history and reiterating a $150,000 price target by the end of 2026.
In a note to clients on Monday, the analysts, led by Gautam Chhugani, argued that recent price pressure does not undermine bitcoin’s long-term investment thesis. They said the pullback lacks the typical triggers seen in past bear markets, such as major failures, hidden leverage, or systemic breakdowns.
“What we are experiencing is the weakest bitcoin bear case in its history,” the analysts wrote, adding that the sell-off reflects waning confidence rather than problems with bitcoin’s underlying structure.
Institutional backdrop remains supportive
Bernstein pointed to a markedly different macro and institutional backdrop compared with prior downturns. The firm cited spot bitcoin ETF adoption, increasing corporate treasury participation, involvement from large asset managers, and a more favorable political environment in the U.S. as key factors supporting the current cycle.
The analysts said that, unlike previous drawdowns, “nothing blew up,” and no major balance sheet stress has surfaced across the ecosystem, even as sentiment has deteriorated.
Addressing key bear arguments
On bitcoin’s recent underperformance relative to gold during periods of macro stress, Bernstein said the asset still trades primarily as a liquidity-sensitive risk asset, not yet as a mature safe haven. Tighter financial conditions and high interest rates have favored select assets such as gold and AI-related equities, while bitcoin remains positioned to benefit when liquidity conditions improve.
The analysts also rejected claims that bitcoin is losing relevance in an AI-driven economy. They argued that blockchains and programmable wallets are well suited to an emerging “agentic” digital environment, where autonomous software systems require global, machine-readable financial rails—an area where traditional banking infrastructure remains constrained.
Quantum risk and balance sheet concerns
Bernstein acknowledged that quantum computing poses long-term cryptographic challenges but said bitcoin is not uniquely exposed. The firm argued that all critical digital and financial systems face similar risks and are likely to migrate toward quantum-resistant standards in parallel. Bitcoin’s open-source codebase and growing institutional participation were cited as advantages in adapting to such changes.
The analysts also dismissed concerns around leveraged corporate bitcoin holdings and miner capitulation. They said major corporate holders have structured liabilities to withstand extended downturns. Citing disclosures from Strategy, Bernstein noted that the firm would only face balance sheet restructuring if bitcoin fell to around $8,000 and remained there for five years.
Meanwhile, the firm said miners have diversified revenue streams by reallocating power capacity toward AI data center demand, reducing pressure from bitcoin production costs.
Long-term outlook unchanged
Based on these factors, Bernstein concluded that forced-selling risks have diminished materially and that the current downturn does not threaten bitcoin’s longer-term adoption trajectory.
The firm maintained its view that structural drivers—ETF infrastructure, institutional participation, and improving liquidity conditions over the cycle—support a $150,000 bitcoin price target in 2026, despite near-term volatility, according to The Block.