Bernstein says Bitcoin’s latest decline looks more like a late-stage bull market correction than the start of a long crypto winter. In its latest note to clients, the firm said the digital asset market is now in a “short-term bear cycle” after Bitcoin fell 40% from its all-time high and briefly struggled around $75,000. The bank expects that weak phase to end during 2026.
Report points to a possible floor near the prior cycle peak
The research team led by Gautam Chhugani said a reversal could emerge this year, with Bitcoin potentially finding a bottom near the previous bull market high, or around $60,000. Bernstein placed that timing in the first half of the year. The call is not framed as an instant rebound. Instead, the report expects Bitcoin to build higher lows over time before a broader recovery takes shape.
Gold’s strength has hurt Bitcoin on a relative basis
Bernstein also linked the pullback to Bitcoin’s underperformance against gold over the past year. Analysts said heavy buying by global central banks has continued to support gold prices. As central banks in countries including China and India increased gold reserves, Bitcoin’s market capitalization fell to roughly 4% of gold’s total market value, close to its lowest level in two years. By the end of 2025, gold’s share of global foreign exchange reserves had risen to about 29%, according to the report.
ETF growth and corporate accumulation remain central to the thesis
Even with Bitcoin showing relative weakness, Bernstein described the last two years as the most important institutional cycle in Bitcoin’s history. The firm argued that this cycle differs from earlier retail-driven swings because it rests on two major supports: spot Bitcoin ETFs with assets under management reaching about $165 billion, and the rise of corporate “Bitcoin treasury” buyers.
On market structure, the analysts said institutional investors have not fully exited. Spot ETFs have seen outflows recently, but those remain small relative to total holdings. The report also said there has been no clear miner capitulation tied to financial stress, partly because some mining companies have diversified revenue by shifting toward AI data center business lines.
US policy signals and Strategy’s buying stay in focus
Bernstein also flagged potential support from US policy, including the idea of building a strategic Bitcoin reserve using government-seized assets. The analysts added that Fed chair candidate Kevin Warsh could help form a broader political alliance with the crypto industry, keeping alive the argument that Bitcoin could be treated as a sovereign or reserve asset.
The report said, “If digital asset markets keep falling, we do not believe the US government will remain passive.” Corporate demand is another part of that view. Bernstein highlighted that major holders led by Strategy kept buying during the correction and were not shaken even when Bitcoin briefly fell below their cost basis. Since the start of the year, the company has purchased $3.8 billion worth of Bitcoin.
Based on those factors, Bernstein said the current weakness fits a correction inside a broader bull market structure. Volatility may continue in the short term, but the firm expects a recovery in 2026 to set up Bitcoin’s next major cycle.