Bitcoins recent strength amid geopolitical uncertainty reflects a fundamental shift in the asset’s ownership structure, according to Wall Street brokerage Bernstein.
The cryptocurrency rose about 7% last week, with ether (ETH) up about 9%, outperforming gold and global stock indexes as markets reacted to escalating global conflicts. The broker said the performance highlights how institutional ownership is reshaping the market.
“We believe the combination of Strategy’s treasury model and ETFs has transformed bitcoin’s ownership structure,” analysts led by Gautam Chhugani said in the Monday report.
The strategy, which the analysts described as acting as a “bitcoin central bank of last resort,” has continued to buy through the downturn. The firm extended its series of weekly purchases, acquiring BTC for about $1.57 billion, according to a Monday filing.
The company, led by executive chairman Michael Saylor, bought 22,337 bitcoin at an average price of $70,194 each, bringing its total holdings to 761,068 BTC acquired at an average price of $75,696 per coin.
Strategy has also expanded its preferred equity financing strategy through the STRC product, which offers investors high yield income linked to the Secured Overnight Financing Rate (SOFR) and has generated increasing trading volumes. The extra liquidity helps fund more bitcoin purchases through offers on the market.
Meanwhile, spot bitcoin exchange-traded funds (ETFs) have attracted about $2.1 billion in inflows over the past three weeks, bringing the ETF’s holdings to about 6.1% of the total bitcoin supply. The analysts said these vehicles are increasingly drawing allocations from wealth managers, pension funds and sovereign investors.
Retail investors have been net sellers in recent months, but long-term owners remain dominant. About 60% of the bitcoin supply hasn’t moved in more than a year, a signal that many investors continue to treat the asset as a long-term store of value, the report said.
Bitcoin’s recent outperformance under geopolitical stress has also revived the debate about its role as “digital gold.” While the token lagged behind the precious metal for most of the past year, its rise during the latest round of global uncertainty has led some analysts to argue that the asset is beginning to behave more like a geopolitical hedge, though the comparison remains contested.
For equity investors, Bernstein added that Strategy (MSTR) remains a high-beta method for gaining exposure to bitcoin’s upside, currently trading at about a 14% discount to its bitcoin net worth on an equity basis.
The largest cryptocurrency was trading 4.4% higher around $73,900 at press time. Ether, the second largest crypto by market capitalization rose 8.4% to $2,273.
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