‘Crypto is back’: Various investor groups see a need to ramp up amid US political shift, Bernstein says
2025-01-28
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Following recent discussions with a diversified range of investors across the United States, analysts at research and brokerage firm Bernstein said several groups recognized that “crypto is back” and saw a need to ramp up their market activity.
Investor groups across finance, payments, data centers, energy, growth, technology and crypto-focused business sectors are distinctly aware of the political shift underway under the Trump administration, Bernstein analysts led by Gautam Chhugani wrote in a note to clients on Tuesday. However, investors are not specifically aware of the “transformative digital assets regulatory regime expected,” according to the analysts. “Things are still early, and we expect investors are just getting started on crypto,” Chhugani said.
Bernstein saw equal interest from long-only funds and hedge funds, but discussions were more specific to crypto-related stocks — including AI-diversified miners and crypto exchanges — and bitcoin price catalysts, the analysts said. However, there was also interest in the disruptive impact of stablecoins amid potential new U.S. legislation.
The analysts also witnessed interest from a newer group of investors — primary market investors into convertibles/fixed income — particularly in relation to MicroStrategy’s capital market issuances. However, there was much broader interest in MicroStrategy’s effect on the bitcoin market and the risk factors associated with its bitcoin acquisition strategy, they said. 
Bernstein’s $200,000 bitcoin target, crypto exchanges, AI opportunities, stablecoins and MicroStrategy
The analysts’ discussions with investors centered around the key catalysts for Bernstein’s long-held bitcoin price target of $200,000 by the end of 2025 and the impact on crypto exchanges, AI opportunities, stablecoins and MicroStrategy.
In terms of the prospect of further crypto market price gains, Bernstein pointed toward regulatory catalysts, including President Trump's crypto executive order, establishing a task force to explore strategic digital asset reserves, and the Securities and Exchange Commission's repeal of SAB 121 — clearing the way for U.S. banks to custody digital assets for the first time. They also noted Bitcoin exchange-traded funds and corporate purchases are projected to reach $120 billion in 2025, compared to $60 billion in 2024, potentially supported by banks offering credit or leverage services against their holdings.
“Overall, investors were curious and neutral on bitcoin prices. We did not sense a strong bullish or bearish stance amongst institutional investors,” the analysts said. “Further, within equity investors, focus remains on crypto related equities due to inability to buy spot bitcoin directly or participate via ETFs.”
Regarding crypto exchanges, Bernstein said Robinhood has been one of the strongest stock performers — up 370% over the past 12 months and around 30% year-to-date. “Investors see it as the strongest beneficiary of the crypto ‘deregulation’ wave, given its product/tokens catch up with crypto exchanges such as Coinbase and Kraken,” Chhugani wrote. While banks and traditional brokers like Schwab entering the market could further reduce exchange fees, Robinhood’s competitive pricing and broader token offerings compared to such potential new entrants mean it is best placed, in the analysts’ opinion.
Investor interest in bitcoin miners is focused on AI potential, with Core Scientific leading due to its already established strong partners and expertise, according to Bernstein. However, Riot's AI pivot, including stalling a 600MW Bitcoin mining project, signals genuine intent and potential better upside given its lower valuation compared to Core Scientific, the analysts noted.
Bernstein also expects stablecoin legislation in 2025 to boost U.S. dollar dominance online, with demand driven by crypto markets, cross-border payments and remittances. Banks and fintechs may adopt stablecoins, attracted by their revenue potential and financial integration, Chhugani added.
Finally, in terms of MicroStrategy’s impact, the analysts said most investors misunderstand the stock, viewing it as overly leveraged in bitcoin, and at some point, reality will hit when capital markets shut down on it. However, investors need to appreciate that the company has pioneered bitcoin-linked capital markets in the absence of banks being slow to adopt bitcoin by issuing convertibles and planning preference shares for investors seeking exposure or volatility arbitrage, they argued.
MicroStrategy remains under-levered, with long-term debt and ample room to issue more instruments while scaling its bitcoin treasury model, the analysts continued, anticipating overall corporate bitcoin purchases, including MicroStrategy’s, to double to $50 billion in 2025, versus $25 billion last year.
Bernstein rates MicroStrategy, Robinhood, Riot, CleanSpark, IREN and Core Scientific as outperform, with price targets of $600, $51, $22, $30, $26 and $17, respectively.
Gautam Chhugani maintains long positions in various cryptocurrencies. Bernstein and its affiliates may receive compensation for investment banking services from MicroStrategy. Certain affiliates of Bernstein act as market makers or liquidity providers in the debt securities of Riot Platforms and equities securities of Robinhood.
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