With a shift in the US political landscape, many investors are feeling optimistic about crypto again. Bernstein analysts, after talking to a bunch of investors, say there’s a growing belief that “crypto is back.”
A New Wave of Interest
This renewed interest isn’t just from crypto-focused companies. Investors from traditional finance, payments, tech, and other sectors are all looking into crypto. They’re interested in everything from crypto exchanges and AI-powered mining to Bitcoin’s price and stablecoins. Even the fixed income and convertible markets are showing more interest, with MicroStrategy’s big Bitcoin bets getting a lot of attention.
Regulatory Changes Could Be Huge
Several things could really change the crypto game. Potential changes include the government exploring digital asset reserves and the SEC possibly loosening rules on banks holding digital assets. If these things happen, we could see a lot more institutional investors getting involved, making the market more liquid. Bernstein predicts a huge jump in companies buying Bitcoin, maybe even doubling the amount they buy each year by 2025.
Despite all the excitement, most institutional investors are taking a “wait-and-see” approach to Bitcoin’s price right now. They’re not making any big bets either way. Many are focusing on crypto-related stocks instead of directly buying Bitcoin.
Stablecoins and Corporate Adoption
Stablecoins are also getting a lot of attention. Bernstein thinks new laws around stablecoins will make them more popular for things like international payments. Banks and fintech companies are looking at how they can use stablecoins to make money.
MicroStrategy is a prime example of a company that’s betting big on Bitcoin. While some think their huge Bitcoin holdings are risky, Bernstein argues that their approach (using convertible debt and preference shares) has helped get more institutions involved in Bitcoin. They think other companies will follow suit, leading to $50 billion in annual corporate Bitcoin purchases by 2025.
Companies Poised for Growth
Bernstein is positive about several companies that are likely to benefit from the crypto boom, including Robinhood, Riot Platforms, and Core Scientific. They believe these companies are well-positioned to take advantage of the increased interest in crypto, driven by clearer regulations, more institutional investors, and the rise of stablecoins.
