Reevaluating Bitcoin's current correction: Bernstein reaffirms a bullish outlook during the drawdown phase

Currently, Bitcoin is trading at $68,020 (up 0.20% over 24 hours), and various concerns are swirling in the market. However, investment bank Bernstein has characterized this drawdown phase as “the weakest among Bitcoin’s bearish scenarios” and reaffirmed a price target of $150,000 by the end of 2026. The firm’s analysts argue that the current correction does not reflect fundamental issues with the asset but rather temporary psychological turbulence among market participants.

Not Structural Weakness, but Confidence Shake—The Nature of the Drawdown

Led by Gautam Chugani, Bernstein’s analysts recently emphasized in a memo that the current drawdown lacks the typical triggers seen in past bear markets. They point out that there are no major project failures, hidden leverage explosions, or systemic collapses driving the ongoing selling pressure.

“We are experiencing the weakest pattern within Bitcoin’s bearish cases,” the analysts stated, adding that the current price pressure reflects a temporary decline in market confidence rather than problems with the asset’s underlying structure. In other words, this drawdown does not undermine Bitcoin’s long-term investment thesis.

Institutional Support as a Buffer During the Drawdown

A key point Bernstein highlights is that this cycle differs significantly from previous correction phases due to the macro and institutional environment. The firm cites the rapid adoption of spot Bitcoin ETFs, increased corporate treasury holdings, institutional participation from major asset managers, and improved political conditions in the U.S. as structural factors supporting the market even amid the drawdown.

“Unlike previous correction phases, there has been no large-scale balance sheet breakdown across the ecosystem,” the analysts explained, emphasizing that even amid deteriorating sentiment, “nothing has exploded.” This suggests that the current drawdown does not pose systemic risks.

Multifaceted Counterarguments to the Bearish Case

Regarding Bitcoin’s underperformance relative to gold during macro stress periods, Bernstein offers a sober analysis. They view Bitcoin as still not fully matured as a safe haven asset and primarily traded as a liquidity-sensitive risk asset. The current tough financial conditions and high interest rate environment favor assets like gold and AI-related stocks, with Bitcoin positioned to benefit once liquidity conditions normalize.

Furthermore, in response to arguments that Bitcoin’s importance is waning in the AI era, the analysts strongly disagree. They point out that blockchain and programmable wallets are highly suited to the emerging “agentic” digital environment, and in areas where autonomous software systems require globally accessible, machine-readable financial infrastructure, traditional banking systems are less capable.

Corporate Holdings and Miner Strategies During the Drawdown

On quantum computing, Bernstein states that Bitcoin is not particularly at risk. All critical digital financial systems face similar threats, and the transition to quantum-resistant standards is likely to proceed in parallel. The open-source nature of Bitcoin and increasing institutional participation are seen as advantages in adapting to these changes.

Regarding corporate Bitcoin holdings, Bernstein remains optimistic. Major corporate holders have structured their debt to withstand long-term drawdowns, and even if Bitcoin drops to $8,000 and remains there for five years, they believe it would only lead to balance sheet restructuring rather than insolvency.

Miners are also not merely passive; they are diversifying revenue streams by shifting power capacity toward AI data centers, which helps reduce pressure from Bitcoin production costs.

Structural Strengthening Post-Drawdown Opens Path to 2026

Based on these multiple factors, Bernstein concludes that the risk of forced selling has significantly diminished. The current drawdown is unlikely to threaten Bitcoin’s long-term adoption trajectory.

The firm reaffirmed that structural factors such as the expansion of spot ETF infrastructure, ongoing institutional participation, and improved liquidity conditions throughout the cycle support a Bitcoin price target of $150,000 by the end of 2026. Despite short-term volatility and the current drawdown, these fundamental changes are laying the groundwork for the next cycle.