In a note to clients on Monday, Bernstein analysts reiterated their conviction in Bitcoin, maintaining a "high conviction but conservative price target" of $200,000 for this cycle.
However, the recent "Digital Asset Note" highlights the breadth of public interest in the financial innovation unleashed by blockchain technology, surpassing Bitcoin's use case as a "store of value."
Bernstein notes that while many investors distinguish between "blockchain (useful technology) and cryptocurrencies ('useless')", this distinction has become blurred.
Analysts point to stablecoins and token-driven financial applications being built on public blockchain networks like Ethereum, which has "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, evidenced by the successful launch of spot Bitcoin ETF funds, which now manage nearly $120 billion in assets.
Recently, the launch of Ethereum ETF funds has brought managed assets to around $9 billion, with Ethereum ETF inflows reaching $815 million in the past 20 days.
Bernstein emphasizes Ethereum's uniqueness as a "decentralized computer," making it suitable for interesting blockchain use cases like stablecoins and tokenization.
They add that financial activity on the blockchain is evolving from "retail trading of memes, to the 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," reflected in the growing interest from investors in Ethereum ETF inflows.