Main Points :
- Bitcoin’s recent 25% decline from its all-time high is viewed by U.S. investment bank Bernstein as a “shallow correction,” not the beginning of a prolonged downturn.
- Long-term holder selling was largely absorbed by spot Bitcoin ETF inflows and corporate treasury allocations, showing structural demand.
- Despite $3B in outflows over three weeks, ETF AUM reached $125B, reflecting maturing institutional participation.
- U.S. political alignment, regulatory clarity in 2025–2026, and easing macro conditions form strong structural tailwinds.
- Thomas Lee predicts Ethereum may enter a 100× supercycle, similar to Bitcoin’s performance between 2017–2025.
Bitcoin’s Recent 25% Drop: A Shallow Correction, Not a Trend Reversal
1. Understanding the 25% Pullback
Bitcoin fell about 25% from its October 6 all-time high of $126,000, sparking concern about whether a deeper downturn was forming.
However, Bernstein analysts argue that this is not the start of a major bear market. Instead, they see the drop as part of Bitcoin’s ongoing short-term cyclical adjustment.
Historically, Bitcoin’s four-year halving cycles peaked in 2013, 2017, and 2021. Many investors still internalize this pattern and expect Q4 weakness in 2025, triggering preemptive profit-taking—a form of self-fulfilling prophecy.
But current structural conditions differ sharply from those past cycles.
2. Why This Cycle Is Different: Stronger Fundamentals
Bernstein highlights that previous crypto cycles saw 60–70% corrections, whereas today’s 25% pullback is significantly milder.
Two major forces prevent a deeper decline:
(A) Long-Term Holder Supply Absorbed by ETF and Corporate Demand
Over the past six months, long-term holders (1+ year) sold 340,000 BTC (~$38B).
Yet inflows nearly matched this amount:
- Spot ETFs + Corporate Treasury Allocations = ~$34B
This absorption demonstrates structural maturity in Bitcoin markets.
(B) ETF Institutional Ownership Continues to Rise
- 2024 year-end: 20% institutional ownership
- Today: 28%
- Total ETF AUM: $125B
- Outflows in last 3 weeks: $3B, yet AUM remains historically high.
This implies institutions are holding with stronger conviction than in past cycles.
3. Debunking Fears About Strategy Bitcoin Holdings
Some analysts speculated that Strategy (MicroStrategy-like entity) might be forced to liquidate BTC if prices continue falling, as the company has $8B in debt against $61B in Bitcoin.
But Bernstein reports:
- Strategy management has confirmed they have not sold a single BTC.
- They lack any intention to sell.
- Their leverage ratio is conservative by historical standards.
This removes a major source of anxiety from the market.
4. Political and Macro Tailwinds Strengthen Bitcoin’s Long-Term Outlook
Bernstein lists several structural forces supporting continued Bitcoin appreciation:
(A) Pro-Crypto Political Environment in the U.S.
Under the Trump administration, cryptocurrency is elevated to a strategic national priority.
This unprecedented alignment between politics and digital assets improves long-term regulatory stability.
(B) Expected Regulatory Clarity: 2025–2026
The Clarity Act and broader U.S. market-structure legislation is expected to pass between late 2025 and early 2026.
(C) Liquidity Expansion as Interest Rates Decline
Falling interest rates usually drive liquidity into risk-on assets, historically benefiting Bitcoin.
Combined, these factors form a supportive environment for long-term Bitcoin appreciation.
Ethereum’s Incoming Supercycle: Thomas Lee’s 100× Prediction
1. Ethereum May Replicate Bitcoin’s 100× Journey
Thomas Lee, head of research at Fundstrat Global Advisors and chairman of Bitmine Immersion Technologies, argues that Ethereum is entering its own supercycle.
He compares ETH today to BTC in 2017:
- Fundstrat recommended BTC at $1,000 in 2017.
- Over the next 8.5 years, BTC endured:
- 6 declines of 50%+
- 3 declines of 75%+
- Yet by 2025, Bitcoin became a 100× asset.
Lee emphasizes that investors had to survive extreme volatility to capture that exponential gain.
2. Why Ethereum Is Positioned for Exponential Upside
Lee argues that:
- ETH is deeply undervalued relative to its network fees, L2 expansion, RWAs (Real World Assets), and institutional adoption.
- Surging demand for staking yield and tokenized assets strengthens its fundamental value.
- The present correction may offer one of the most attractive entry points before a multi-year growth phase.
5. Market Context and Additional Observations from Recent Crypto Trends
To enrich the narrative, we compare today’s market conditions with recent global developments:
(A) Japan Bond Shock and Liquidity Tightness
Japan’s surprise yield-curve adjustment earlier in 2025 triggered global deleveraging.
This contributed to short-term crypto weakness but did not fundamentally alter long-term demand.
(B) Growing Tokenized Asset Market
Banks across the U.S., Europe, Singapore, and Hong Kong aggressively accelerate tokenization pilots, expanding Ethereum-based RWA markets.
(C) Institutional Rotation Toward “Quality” Crypto Assets
Funds increasingly prioritize:
- BTC
- ETH
- USDC infrastructure
- Tokenized treasuries
- Top-tier L2 ecosystems
This rotation benefits Ethereum disproportionately.
Summary: A Pivotal Moment for Bitcoin and Ethereum
Bernstein’s message is clear:
- Bitcoin’s 25% decline is not a sign of structural weakness—it is a shallow correction within a long-term uptrend.
- ETF flows, corporate balance-sheet allocations, regulatory alignment, and macro tailwinds form a foundation far stronger than in previous cycles.
Thomas Lee’s analysis pushes the narrative further:
- Ethereum may now be at the beginning of its own 100× supercycle, just as Bitcoin was in 2017.
For investors seeking new crypto assets, revenue opportunities, and practical blockchain applications, the present moment could represent one of the most attractive risk-adjusted entry windows in years.
