'The best days of crypto are ahead': Bernstein sees asymmetric upside and structurally longer bull cycle

The crypto market looks fundamentally stronger as bitcoin (BTC) approaches $80,000, according to analysts at Bernstein, with the recent $60,000 lows marking a clear trough.

The research and brokerage firm pointed to steady institutional inflows from asset managers and wirehouses, Strategy's (MSTR) STRC-fueled bitcoin accumulation, and the growing integration of blockchain rails into real-world finance as key drivers of asymmetric upside.

"The best days of crypto are ahead which will reflect in a higher and structurally longer crypto bull cycle," the analysts led by Gautam Chhugani wrote in a note to clients on Monday.

Institutional demand led by exchange-traded funds is strengthening bitcoin's ownership base, with around 60% of supply not moved in over a year, while Strategy's STRC perpetual preferred product is scaling as a high-yield, low-volatility vehicle attracting income-focused investors and funding further bitcoin accumulation beyond its current 818,334 BTC holdings, the analysts said.

Institutional access also continues to expand, Bernstein noted, with new distribution channels from Morgan Stanley's bitcoin ETF and Charles Schwab's spot bitcoin and ether trading platform opening up in recent weeks and broadening participation.

Meanwhile, stablecoin adoption has increasingly decoupled from crypto market sentiment and price cycles, the analysts highlighted, demonstrating persistent, real-world demand for dollar-backed payments and settlement rails, with stablecoin supply at all-time highs of more than $300 billion.

Beyond stablecoins, private credit and Treasuries are expanding the $345 billion tokenized real-world asset space 110% year-over-year, with platforms like Hyperliquid also seeing rising activity in onchain equities and commodities trading, the analysts noted.

However, some concerns remain, with quantum computing posing a real but manageable long-term risk, the analysts acknowledged, while expecting sufficient time for the blockchain ecosystem to transition to post-quantum security.

Gautam Chhugani maintains long positions in various cryptocurrencies. Bernstein or its affiliates may receive compensation for investment banking services from Strategy.