Has Bitcoin bottomed out and rebounded? Bernstein: Institutional adoption ends the four-year cycle curse

Bernstein analyst Chhugani states that Bitcoin has bottomed out, with November’s $80,000 as the bottom. Forecasts it will reach $150,000 in 2026 and $200,000 in 2027. Believes that concerns over the four-year cycle are exaggerated, and that the “digital asset revolution” driven by institutional demand will extend the bull market.

Bernstein Breaks the Myth of the Four-Year Cycle

Bernstein’s bottoming judgment challenges the traditional theory of Bitcoin’s “four-year cycle.” Historically, Bitcoin tends to experience three consecutive years of gains followed by a significant correction. Many analysts believe that the October 2025 high of $126,000 could be the peak of this cycle, after which a prolonged bear market will ensue. However, Bernstein’s team explicitly opposes this view.

The analysts wrote: “As we previously emphasized, we believe that in the current market environment driven by institutional demand for adoption, concerns about the four-year cycle pattern are unreasonable.” This judgment is based on a key change: the large-scale entry of institutional investors has altered Bitcoin’s market structure. In past cycles, Bitcoin was mainly held by retail investors and crypto-native institutions, whose behavior was highly emotional—greedy buying at market peaks and panic selling at lows.

The current situation is completely different. The launch of Bitcoin ETFs has provided compliant investment channels for traditional financial institutions, with pension funds, asset management firms, family offices, and other long-term investors beginning to allocate to Bitcoin. These institutional investors tend to act more rationally and steadily, making decisions based on asset allocation logic rather than emotion. When Bitcoin’s price declines, they often see it as an opportunity to buy more rather than a signal to sell. This structural change reduces Bitcoin’s volatility and extends the bull cycle.

Bernstein continues to forecast that the token will reach $150,000 in 2026 and $200,000 in 2027. This prediction is well above most analysts’ conservative estimates, showing Bernstein’s strong confidence in institutional adoption trends. From the current $92,000, $150,000 implies about 63% upside, and $200,000 implies 117% growth. While these targets are aggressive, they are not without precedent—Bitcoin surged from $10,000 to $69,000 in 18 months during the 2020-2021 bull market, a 590% increase.

The Engine of the Tokenization Supercycle

Chhugani points out that despite Bitcoin falling 6% in 2025, this year has been positive for crypto-related stocks and IPOs. Looking ahead, a “supercycle” of tokenization led by marquee companies such as Robinhood (HOOD), the largest compliant crypto exchange in the US (COIN), Figure (FIGR), and Circle (CRCL) will continue to drive institutional adoption and promote the development of the crypto industry.

Three Pillars of the Tokenization Supercycle

Real-World Asset (RWA) Tokenization: On-chain bonds, stocks, real estate, and other traditional assets, with a market size potentially reaching trillions of dollars

Stablecoin Payment Network Expansion: USDT, USDC used for cross-border payments and corporate settlements, enhancing blockchain’s practical utility

Crypto-Native Financial Infrastructure: The US’s largest compliant crypto exchanges and platforms like Robinhood becoming bridges between traditional finance and the crypto world

The successful IPOs of Robinhood and the largest compliant US crypto exchange, along with ongoing business growth, demonstrate that the crypto industry is moving toward mainstream. Figure focuses on real estate and asset tokenization, while Circle, as the issuer of USDC, holds a key position in the stablecoin market. The common feature of these companies is that they no longer serve only crypto-native users but are beginning to provide services to traditional financial institutions and corporate clients. This shift in customer base signals industry maturity.

Bernstein emphasizes that the “digital asset revolution” is not a short-term speculative craze but a long-term structural transformation. As more traditional assets are tokenized, stablecoins become standard tools for cross-border payments, and banks and asset managers start incorporating crypto assets into their portfolios, the entire financial system’s operational logic will fundamentally change. In this context, Bitcoin, as the flagship of digital assets, will be revalued.

Technical and Liquidity Double Confirmation of the Bottom

Bitcoin is expected to rebound in early 2026, after a sell-off in Q4 last year, with recent weeks showing narrow trading ranges. Forced liquidations and sell-offs by long-term holders caused the price to fall up to 35% from the October high. On Sunday, 10X Research indicated that technical indicators show “Bitcoin has entered an uptrend.” The cryptocurrency has closed lower for three consecutive months in December, a pattern that has only occurred 15 times historically, often paving the way for profits in January.

Fundstrat Digital Asset’s head Sean Farrell said Monday evening: “This is a good tactical rebound opportunity.” Farrell pointed out that the Federal Reserve’s balance sheet expansion and the reduction of the Treasury General Account (TGA)—similar to the US government’s checking account—are positive signals for Bitcoin. “Our liquidity is improving, and capital flows are also improving. We’re finally seeing a few days of stock performance outperforming the stock market,” Farrell said.

He predicts Bitcoin may test the $105,000 to $106,000 level, but his baseline scenario remains a significant decline in the first half of this year, followed by a rebound toward the end of 2026. This view contrasts with Bernstein’s optimistic forecast, indicating market divergence on the future trend. However, many analysts agree that the core judgment of a bottom has been reached, with differences only in the magnitude and timing of the rebound.

Bitcoin held above $92,000 per coin early Wednesday, with recent momentum fueling optimism that the severe sell-off in Q4 may be over. From a technical perspective, the $80,000 support level, tested multiple times, has formed a solid bottom structure. Every time the price dips near this level, strong buying support emerges, indicating a large number of long-term investors are positioning there.

Improved liquidity indicators further confirm the bottoming judgment. The expansion of the Fed’s balance sheet suggests increased market liquidity, generally favorable for risk assets. The reduction of the TGA indicates increased government spending, which will eventually flow into financial markets. In this macro environment, Bitcoin, as a liquidity-sensitive asset, is likely to benefit first.