Bernstein: Bitcoin Not to Blame for Crypto Market Crash
According to analysts at Bernstein, Bitcoin is not responsible for the recent crash in the crypto market. They believe that the drop in prices is related to fears of a recession and disruption in the yen markets.
The analysts remain optimistic and do not see any new specific threats to Bitcoin. They anticipate a potential increase in monetary liquidity leading to a revaluation of assets like BTC.
Institutional adoption trends continue to grow, with Bitcoin ETFs attracting significant volumes.
Bernstein analysts recently stated that Bitcoin is not to blame for the price drop in the crypto market.
This analysis comes as Bitcoin plunged below $50,000 on Monday, raising concerns about a recession in the US and disruption in the yen markets. According to Bernstein, despite this decline, there are no new negative factors for the crypto market.
The Reasons Behind the Market Crash
Over the weekend and into Monday morning, prices in the crypto market saw significant drops. Bitcoin lost nearly 20% of its value, falling below $50,000, while Ethereum saw a drop of almost 30% since Friday, approaching $2,100.
Bernstein analysts, including Gautam Chhugani, Mahika Sapra, and Sanskar Chindalia, explain that this initial reaction of Bitcoin as a “risk off” asset is not surprising, recalling a pattern observed during the flash crash in March 2020.
Absence of New Negative Factors
Bernstein analysts remain optimistic and do not see any new specific threats to Bitcoin. They anticipate that typical responses to US recession fears, such as interest rate cuts and increased monetary liquidity, could lead to a revaluation of hard assets like BTC, often compared to digital gold.
Institutional Adoption Trends
Bernstein highlights the positive evolution of institutional adoption trends. Unlike previous cycles, where investing in Bitcoin through crypto exchanges was more complex, Bitcoin spot exchange products (ETFs) are now available and highly liquid, with daily volumes of around $2 billion. Recently, Morgan Stanley announced that its financial advisors will be able to offer Bitcoin Spot ETFs to certain clients starting from August 7th.
Bitcoin ETFs have seen continuous inflows, reaching over $17 billion since the beginning of the year. Furthermore, new Ethereum ETFs have also started well, with inflows of $1.6 billion, despite net outflows of $2.1 billion from the Grayscale ETHE fund, which has higher fees.
At the opening of the US markets, Bitcoin ETFs experienced impressive volumes, surpassing $2.5 billion in just a few hours. BTC rebounded by 10% during the same time period.
Impact of US Elections and Future Outlook
Bernstein highlights that Bitcoin remains a “Trump trade” due to the market’s preference for the former US president’s pro-crypto stance. The narrowing probability gap between Trump and Harris on Polymarket coincided with a weakness in Bitcoin and cryptocurrencies. Analysts predict that the crypto market will remain in a range until the US elections, reacting to events such as presidential debates and final election results.
Overall, Bernstein anticipates that the crypto market will continue to react to macroeconomic indicators and political developments in the third quarter. If stock markets recover due to Fed intervention, cryptocurrency markets are expected to follow this trend.
