Bernstein says Bitcoin rebound reflects more resilient long-term holder base

Bitcoin’s recent rebound reflects a strengthening base of long-term holders as ETF inflows and corporate treasury buying reshape the asset’s ownership structure, Bernstein said in a Monday research note shared with Cointelegraph.

Bernstein said Bitcoin outperformed gold and major equity indexes over the past week despite heightened conflict in the Middle East, with Bitcoin (BTC) up 7% and Ether (ETH) up 9% over the period.

Analysts attributed the shift partly to continued US spot Bitcoin exchange-traded fund (ETF) inflows and the steady accumulation of corporate buyers such as Strategy, which they say are gradually strengthening Bitcoin’s long-term holder base, contributing to a more stable market structure.

“Maybe it takes a physical conflict to realise Bitcoin remains the most portable (cross-border), digital and liquid asset with no counterparty risks,” Bernstein said.

Bernstein’s broader point is that ownership is changing. As roughly 60% of Bitcoin supply has been inactive for more than a year, the market is increasingly dominated by longer-term holders rather than fast-money flows. As more Bitcoin moves into ETFs, corporate treasuries and wallets that rarely transact, short-term sell pressure may matter less, potentially giving the market a more stable base during periods of stress.

Percentage of supply last active more than one year ago. Source: Glassnode, Bernstein analysis

ETFs, corporate treasuries fuel Bitcoin resilience

CoinGecko data shows that BTC traded at about $73,208 at the time of writing, up over 8% in the last seven days amid heightened geopolitical tensions in the Middle East.

SoSoValue data showed that US spot Bitcoin ETFs had three consecutive inflow weeks totalling over $2.1 billion. Bernstein attributed the inflows to rising long-term capital allocations through wealth managers, institutional funds, including pension and sovereign funds.

Bernstein said spot BTC ETFs have nearly reversed their year-to-date (YTD) capital outflows, with net withdrawals narrowing to about $460 million, compared with roughly $92 billion in total assets under management (AUM). 

Bernstein also pointed to Strategy’s continued Bitcoin accumulation this year.

Strategy added 66,231 BTC year-to-date for roughly $5.6 billion at an average purchase price of around $85,000, according to Bernstein. 

On March 9, Strategy announced that it had acquired 17,994 Bitcoin for $1.28 billion between March 2 and 8, pushing its total reserves above 738,000 BTC, worth about $54 billion. 

Bitcoin Treasuries data shows that ETFs and exchanges hold about 1.6 million BTC, worth over $117 billion, while public companies hold 1.15 million BTC, worth about $84 billion.