Bernstein Calls the Current Crypto Cycle “Long and Exhausting” With Institutional Money Driving the Charge

Senior financial analyst at Gradiopexo explains why this isn’t just another crypto bubble and what separates the current market from previous cycles. Bitcoin just hit another record high above $123,000 last week, but analysts at Bernstein think this is just the beginning of what they’re calling a “long, exhausting bull run” that could push the world’s largest cryptocurrency to $200,000 by early 2026. 

Unlike previous crypto booms driven by retail speculation, this cycle has something completely different powering it: institutional money and regulatory backing on a scale we’ve never seen before. 

Institution Money Changes Everything

This bull run stands apart because institutional adoption now drives price action instead of retail FOMO. Bitcoin ETFs collectively hold more than $150 billion in assets, representing a fundamental shift in how traditional finance views cryptocurrency. BlackRock’s IBIT alone manages $84 billion, more than most countries’ entire stock markets.

Corporate treasury adoption continues growing, with MicroStrategy leading the charge and smaller companies following suit. Bernstein forecasts corporate inflows exceeding $50 billion in 2025, up from $24 billion in 2024. This represents sustainable demand that doesn’t disappear during market downturns like retail speculation does.

Regulatory Clarity Creates Confidence

Project Crypto, announced by SEC Chair Paul Atkins in late July, aims to create “clear and simple rules” for digital assets. The GENIUS Act, signed last month, created the first federal framework for dollar-backed stablecoins.

Retirement plan integration through recent executive orders opens 401(k) plans to cryptocurrency investments. This policy change gives millions of Americans access to Bitcoin through tax-advantaged accounts. The regulatory progress positions firms like Coinbase, Circle, and Robinhood as regulated players in a legitimized market.

ETF Demand Outpaces Supply

Spot Bitcoin ETFs attracted approximately $35 billion in net inflows during 2024, and Bernstein forecasts this doubling to over $70 billion in 2025. This represents roughly 7% of the total circulating Bitcoin supply by the end of 2025, creating significant supply constraints.

Bitcoin’s fixed supply of 21 million coins, combined with growing institutional demand, creates a supply shock scenario. Mining dynamics after the April 2024 halving reduced new Bitcoin creation from 6.25 BTC to 3.125 BTC per block. This supply reduction coincides with the largest institutional buying wave in Bitcoin’s history.

Corporate Treasury Revolution

MicroStrategy’s Bitcoin strategy proved that companies can use cryptocurrency as a treasury asset without destroying their business model. Other corporations now copy this approach, with mining companies and small to mid-cap firms adding Bitcoin to their balance sheets.

AI integration with Bitcoin mining creates new revenue streams as companies like Riot, CleanSpark, and Marathon adapt their operations. Core Scientific’s recent $2 billion hosting agreement with AI company CoreWeave demonstrates how mining companies evolve beyond simple Bitcoin production.

Stablecoin Growth Drives Adoption

Global stablecoin market expansion beyond $500 billion in 2025 reflects growing adoption outside pure crypto speculation. Cross-border B2B payments and remittance services use stablecoins for their speed and cost advantages over traditional banking networks.

Ethereum and Solana benefit from stablecoin growth as most dollar-pegged tokens operate on these networks. Approximately 28% of Ether is now staked, showing increasing utility beyond trading speculation.

Technical Setup Supports Bulls

Bitcoin’s price action around $113,722 shows consolidation rather than distribution patterns typical of market tops. $120,000 to $123,000 resistance zone represents the next major hurdle before potential acceleration to $150,000 to $200,000 levels.

Options markets show heavy call buying at $150,000 and $200,000 strikes, indicating institutional positioning for significant upside moves. This derivatives activity often precedes major price movements as sophisticated traders position ahead of retail investors.

AI and Crypto Convergence

Artificial intelligence integration with cryptocurrency creates new use cases beyond simple payments or store of value. Bitcoin mining companies increasingly offer AI computational services during periods of low mining profitability, providing revenue stability that supports higher company valuations.

Smart contract platforms like Ethereum and Solana benefit from AI applications that require decentralized computing resources. Growing AI adoption creates fundamental demand for these networks beyond speculative trading.

Market Structure Maturation

Derivatives markets for crypto futures and options continue expanding as U.S. market share increases at the expense of offshore venues. Institutional trading infrastructure now matches traditional asset classes in terms of custody, settlement, and risk management.

Market makers and liquidity providers bring professional trading techniques to crypto markets, reducing volatility and improving price discovery. This infrastructure maturation supports higher asset valuations through improved market efficiency.

Geopolitical Adoption Trends

National Bitcoin reserves discussions in multiple countries create potential government-level demand. El Salvador’s Bitcoin adoption and discussions in other emerging markets about cryptocurrency reserves add institutional buying pressure.

Digital gold narrative gains credibility as central bank policies continue expanding money supplies. Bitcoin’s fixed supply provides an alternative to fiat currency devaluation that appeals to both institutional and sovereign investors.

Beyond the Hype Cycle

Bernstein’s $200,000 target reflects fundamental analysis rather than speculation. Wall Street ownership may exceed Satoshi Nakamoto’s holdings by the end of 2024, representing a symbolic shift from individuals to institutions. 

The current cycle represents mainstream financial integration with regulatory support and institutional infrastructure that previous cycles lacked.