Summary
- According to Bernstein, retail investors are increasingly focused on AI stocks, rendering Bitcoin less exciting.
- The firm suggests that the reduced retail engagement indicates a more stable, institutionally driven market rather than a decline.
- Analysts have reiterated their prediction of Bitcoin reaching $150,000 by the end of the year, potentially setting a new all-time high.
In 2026, Bitcoin has experienced a significant drop of around 27%, primarily due to diminished inflows and retail investors shifting their attention to AI stocks. However, Bernstein's analysts contend that this year's subdued activity is a sign of enhanced institutional stability rather than a sign of structural downturn.
A report released on Monday by Bernstein's Global Digital Assets team highlighted a notable decrease in capital inflow into Bitcoin this year. Year-to-date, net inflows from exchange-traded funds and corporate treasury purchases have plummeted to approximately $12 billion, a stark contrast to the $60 billion recorded throughout 2025, marking an 80% decline. Furthermore, Bitcoin ETFs have seen net outflows totaling $2.6 billion from a total asset base of $75 billion.
Despite this downturn, analysts view the situation positively. They argue that retail investors have redirected their focus toward AI stocks, resulting in a Bitcoin holder base that is now more heavily comprised of institutional investors, including pension funds, sovereign wealth funds, and corporate treasury buyers. This shift suggests a more stable market environment compared to the speculative nature of past cycles.
Strategy, a software company that has transitioned into a Bitcoin treasury powerhouse, continues to aggressively accumulate Bitcoin despite recent price declines. This year, the firm raised $7.5 billion through its preferred stock instrument (STRC) and used the funds to acquire roughly 100,000 Bitcoin, bringing its total holdings to over 845,000 BTC, valued at about $53.6 billion.
As of now, the overall crypto market capitalization stands at around $2.25 trillion, a small fraction of the global equity and commodity markets, which Bernstein points out are still the primary focus for many investors this cycle. Several Bitcoin mining companies, including IREN and Cipher Digital, have also shifted towards AI data centers, achieving significant gains in the process.
Currently trading just above $63,000, Bitcoin is approximately 50% lower than its peak in October. Nevertheless, Bernstein upholds its long-term price target for Bitcoin at $150,000 by year's end, reflecting a hopeful outlook amid market challenges.
“We believe this maturation phase of Bitcoin is less appreciated, and the criticism has largely come from its lack of retail momentum—which may not be a bad thing considering retail has crowded into AI,” they stated. “Bitcoin being boring this cycle should not be held against it, and does not take away from the long-term ‘store of value’ thesis, in our view.”