Why Bernstein Expects The Crypto Industry To Rebound From Its Last “Winter”

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If history is any indication, crypto prices will rise exponentially when this crypto winter is over, according to Bernstein. Bitcoin ended 2022 at $16,664, posting a 64% loss for the year and ending more than 75% off its November 2021 all-time high. Even at current lows, however, the cryptocurrency is up around 60% from its 2014 low and is 5 times higher than its 2018 lows. crypto have been spectacular,” Bernstein analyst Gautam Chhugani said in a note on Monday. “Crypto as an industry has a great reputation for fighting back from its lows and taking hits when it’s down.” In 2014, bitcoin posted a 58% loss for the year and fell to $284 after starting the year at $747. It then posted annual returns of 36%, 120% and 1,375% over the next three years. In 2018, it fell 74% for the year, dropping to $3,157 at one point from its starting price for the year of $14,043. Over the next three years, it increased by 95%, 305% and 60%. Ether showed similar recovery. “We think crypto is probably one of the few industries capable of seeing edge-tech-like growth, in a maturing tech landscape,” he added. “Today, crypto reaches less than 5% of total internet users with significant leeway for app adoption.” This focus on apps is part of a critical shift the crypto has undergone in the current cycle, according to Chhugani. The industry has pivoted from the “early days of ‘cryptocurrency'” and is now more focused on apps and utilities, he said. He also added that any criticism that crypto apps are “in a speculative feedback loop and therefore we haven’t seen any mainstream applications beyond speculation” is “fair” but can be resolved. “Investors should continue to focus on long-term consumer adoption of crypto” which “should mirror the growth of the internet as blockchain applications become more mainstream,” he said. “Crypto now has 200 million holders, but around 10 million monthly active wallets using apps,” he added. “As blockchains evolve and applications mature, we expect the monthly user base to grow 10-100x over the long term.

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