Bernstein: BTC sell-off driven by misplaced fear, not a bear market

The recent Bitcoin sell-off is a short-term correction rather than a bear market, driven by investor fears of a peak based on the "four-year cycle" theory, according to a report from Wall Street asset manager Bernstein, as reported by The Block. The firm stated that investors who experienced the cycle tops of 2013, 2017, and 2021 are preemptively selling their holdings in a self-fulfilling prophecy. However, Bernstein noted that while past cycles saw major downturns of 60-70%, the current decline from the all-time high is only about 25%, which it considers a relatively shallow correction. Bernstein's analysis showed that while addresses holding BTC for six months to one year sold 340,000 BTC ($38 billion), this supply was largely absorbed by spot ETFs and corporations. Institutional ownership in spot Bitcoin ETFs has risen from 20% at the end of last year to 28%. Despite net outflows over the past three weeks, total assets under management for these ETFs stand at $125 billion, acting as a crucial buffer against selling pressure. Addressing claims that Strategy might sell its BTC, Bernstein highlighted that the company's management has publicly stated it has not sold a single BTC and has no intention to do so. The firm's leverage of approximately $61 billion is considered manageable relative to its Bitcoin holdings, and Bernstein expects Strategy to continue accumulating BTC despite market corrections. The asset manager concluded that considering both stock and cryptocurrency prices, now is an opportune time to buy.