"Short-term bear market" is not a cause for concern! Bernstein: Bitcoin will bottom out at $60,000 and is brewing a major comeback

In response to Bitcoin’s recent 40% plunge from its all-time high and the tumultuous market that once struggled near $75,000, Wall Street investment bank Bernstein analysts believe that the current downturn in the cryptocurrency market will end within 2026 and usher in a recovery.
In their latest research report to clients, led by Gautam Chhugani, the analysis team pointed out that although the cryptocurrency market is currently in a “short-term bear cycle,” a reversal is expected within this year. “Bitcoin may bottom near the previous bull market high, around $60,000,” with the timing estimated in the first half of the year, followed by a gradual establishment of higher lows, setting the stage for a major comeback.
Bernstein also interprets this correction against the backdrop of Bitcoin’s underperformance relative to gold over the past year. The analysts noted that during this period, global central banks have been aggressively buying gold, providing strong support for gold prices.
The report mentions that as central banks in China, India, and other countries continue to increase their gold reserves, Bitcoin’s market value has fallen to about 4% of gold’s market value, approaching the lowest level in two years. In contrast, gold’s share of global foreign exchange reserves has risen to approximately 29% by the end of 2025.
Despite Bitcoin’s relative weakness, Bernstein believes that the past two years have marked the most significant “institutional cycle” in Bitcoin’s history. Unlike the past periods dominated by retail investors and characterized by speculative “boom and bust” cycles, this cycle is anchored by two major pillars: a rapid increase in spot ETF assets under management to about $165 billion, and the rise of “HODL companies.”
The analysts also pointed out that U.S. policy developments could serve as bullish catalysts. They highlighted the strategy of establishing Bitcoin reserves using assets seized by the government and hinted that under the leadership of new Chair Kevin Warshi, the Federal Reserve (Fed) may form broader political alliances with the cryptocurrency industry. The possibility of Bitcoin being recognized as a sovereign or reserve asset is no longer purely speculative.
The analysts stated, “If the digital asset market continues to decline, we believe the U.S. government will not stand idly by.”
From a market structure and capital flow perspective, Bernstein believes that institutional investors have not fully exited. Although ETF funds have recently experienced outflows, their overall share of holdings remains relatively small. Furthermore, there have been no signs of miners capitulating due to financial crises, mainly because miners have diversified income sources by shifting toward AI data center businesses. Additionally, large corporate holders, represented by Strategy, continued to increase their holdings during the correction, even as Bitcoin briefly fell below cost basis. This year alone, they have accumulated $3.8 billion worth of Bitcoin.