Bernstein Analysts See Crypto Stocks at 'Deep Discount,' Suggesting a Potential Market Bottom
In a note to clients, analysts at Bernstein suggested that the brutal sell-off in cryptocurrency-linked stocks may be approaching its end, presenting investors with what they termed "big discounts."
"Geopolitical uncertainty and a temporary lull in crypto sentiment have hammered these names, creating what we see as a compelling entry point," wrote Gautam Chhugani, lead analyst at Bernstein, and his team.
The report highlights major platform stocks like Coinbase (COIN) and Robinhood (HOOD), alongside fintech firm Figure Technology Solutions (FIGR), which have collectively plummeted nearly 60% from their historic highs. This decline coincides with Bitcoin's struggle to hold the $68,000 level, a stark contrast to its surge beyond $120,000 in the latter half of last year.
While Bernstein maintains an Outperform rating on all three stocks, the firm has prudently lowered near-term price targets ahead of anticipated soft Q1 earnings reports this spring. "We believe a bottom will form around these potentially weak quarterly results," Chhugani noted.
Looking beyond the immediate turbulence, the analysts project a robust 23% EPS growth for Coinbase by 2026. They also pointed to "stronger resilience" in business models like Robinhood and Figure, where revenue streams are largely diversified away from direct crypto exposure. For instance, crypto-linked sales constitute only about 20% of Robinhood's total, while Figure focuses on blockchain tokenization—a market with long-term potential.
"These companies provide a gateway to trillion-dollar future markets: prediction platforms, stablecoins, tokenized real-world assets, and derivatives," Chhugani stated. "They also offer significant upside leverage for any sustained crypto recovery."
Bernstein's broader crypto outlook remains bullish, forecasting a market recovery through 2026 with Bitcoin potentially reaching $150,000. Supporting data shows early-year outflows from Bitcoin ETFs have reversed, with funds now holding approximately 6.1% of the total Bitcoin supply. Furthermore, digital asset treasury giant MicroStrategy (MSTR) continues its aggressive accumulation strategy, now holding roughly 3.6% of all Bitcoin.
Despite Bitcoin's relative stability during recent Middle East tensions, skepticism persists among some traditional finance strategists. "It's a risk asset, pure and simple. The notion that any corner of the market is magically insulated from a broad downturn—especially one driven by an oil price shock—is laughable," said Lee Munson, CIO of Portfolio Wealth Advisors.
Market Voices: A Split Verdict
Michael Torres, Portfolio Manager at Horizon Capital: "Bernstein's call is analytically sound. The valuations are factoring in too much pessimism. For long-term believers in blockchain infrastructure, this is a scale-in moment."
Sarah Chen, Retail Investor & Crypto Enthusiast: "It's exhausting. Every dip is called a 'discount' until it drops another 30%. I'm holding my coins, but I've lost faith in the equities. The volatility is just too divorced from the underlying tech promise."
David R. Klein, Senior Editor at The Financial Digest: "This is a classic analyst move: lower the target, keep the rating. It protects the narrative. The real test is earnings. If Q1 is as bad as feared and guidance is weak, this supposed 'bottom' will fall out."
Anya Petrova, Fintech Venture Partner: "The focus on diversified revenue is key. The winners won't be pure crypto plays. They'll be platforms like Robinhood, where crypto is just one engine among many. That's where the true resilience lies."
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
Click here for in-depth analysis of the latest stock market news and events moving stock prices.
Read the latest financial and business news from Yahoo Finance.