In a note to clients on Monday, Bernstein analysts reaffirmed their conviction in Bitcoin, maintaining a "high conviction but conservative price target" of $200,000 for this cycle.
However, the recent "Digital Asset Memo" highlights the broad public interest in the financial innovation unleashed by blockchain technology, surpassing the use case of Bitcoin as a "store of value".
Bernstein notes that while many investors distinguish between "blockchain (a useful technology) and cryptocurrencies ('useless')", this distinction has become unclear.
Analysts point to stablecoins and token-driven financial applications being built on public blockchain networks like Ethereum, which have "the largest market share".
They argue that "if real companies and institutional investors are innovating on the blockchain, doesn’t that make blockchain networks, and thus, blockchain network assets (like ETH) valuable?"
The report highlights that the cryptocurrency market cycle began with the institutionalization of Bitcoin, as evidenced by the successful launch of spot Bitcoin ETFs, which now manage nearly $120 billion in assets.
Recently, the launch of Ethereum ETFs saw managed assets reach around $9 billion, with Ethereum ETF flows amounting to $815 million in the past 20 days.
Bernstein emphasizes the uniqueness of Ethereum as a "decentralized computer", making it foundational for interesting blockchain use cases such as stablecoins and tokenization.
They add that financial activity on the blockchain is evolving from "retail trading of memes, to blockchain providing open financial rails for capital markets, payments, and new fintech companies".
The analysts conclude that "the narrative around the accumulation of value in public blockchain networks is at a critical turning point", which is reflected in the growing investor interest in Ethereum ETF flows.