Bitcoin Resilience: Bernstein Says 26% Drop Shows Strong Institutional Demand

Bitcoin Shows Unprecedented Market Resilience While Tariffs Reshape Mining Landscape

  • Bitcoin shows resilience by being down only 26% from its record high, compared to previous 50-70% drawdowns during crises.
  • Bernstein analysts attribute this strength to “more resilient capital” and growing institutional adoption through ETFs and corporate treasuries.
  • Tariffs pose challenges for bitcoin miners, but larger miners with AI optionality like Riot Platforms, IREN, MARA Holdings, and CleanSpark could gain market share.

Bernstein analysts have highlighted bitcoin’s resilience in the current market, noting that the cryptocurrency being down just 26% from its all-time high demonstrates remarkable strength compared to previous market downturns. The world’s largest cryptocurrency has shown a notably stronger performance during recent challenges than in past crises, according to a report from the financial services firm.

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The analysts, led by Gautam Chhugani, pointed out that previous market disruptions such as the COVID-19 pandemic and interest rate shocks had triggered much steeper 50-70% “fall off the cliff” drawdowns for bitcoin. This comparatively milder decline suggests a fundamental shift in the market dynamics supporting bitcoin’s value.

“Bitcoin’s digital Gold thesis has strengthened driven by growing institutional adoption – institutional flows via ETFs and corporate treasuries,” wrote the Bernstein team in their report. The price action, they noted, “suggests demand from more resilient capital.”

Tariffs Impact on Mining Operations

Despite bitcoin’s overall resilience, the report highlights that recently imposed tariffs pose significant challenges for the cryptocurrency mining sector. These trade measures impact the mining supply chain and have negative implications for U.S. bitcoin miners’ hashrate – the total computational power used to mine and process transactions on the blockchain.

The hashrate serves as a key indicator of competition in the mining industry and reflects mining difficulty levels. As these challenges emerge, not all miners will be equally affected by the changing landscape.

Larger Players Positioned to Gain Market Share

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According to Bernstein’s analysis, large bitcoin mining operations could actually benefit from the current situation. Established miners with significant scale and Artificial Intelligence (AI) capabilities stand to gain market share amid the challenging conditions.

The report specifically mentioned four companies that could strengthen their positions: Riot Platforms (RIOT), IREN (IREN), MARA Holdings (MARA), and CleanSpark (CLSK). These companies’ existing scale and AI optionality give them competitive advantages that could help them navigate the challenges posed by tariffs while potentially expanding their market presence.

The findings suggest that while tariffs create headwinds for the overall mining sector, the impact will likely be uneven, with larger, more technologically advanced operations better positioned to withstand and potentially benefit from the changing competitive landscape.

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