Bitcoin surpasses gold and equities amid global unrest as ETFs and strategies gather momentum.

Wall Street broker Bernstein observed a change in institutional ownership as a factor behind bitcoin’s stability during the recent wave of global unrest.

Bitcoin outperformance linked to institutional ownership change, according to Bernstein. (Unsplash, modified by CoinDesk)

Key points:

• Bitcoin experienced an approximate 7% increase last week, surpassing both gold and equities amidst geopolitical instability, Bernstein noted.
• The brokerage attributed this resilience to a transition in ownership towards institutional investors via spot ETFs and Michael Saylor’s Strategy.
• Long-term holders and institutional funds are bolstering bitcoin’s capital foundation even as retail investors divest, the report indicated.

Bitcoin’s BTC$73,470.16 recent strength amid geopolitical uncertainty signifies a fundamental change in the ownership landscape of the asset, as stated by Wall Street broker Bernstein.

The cryptocurrency gained approximately 7% last week, with ether (ETH) rising nearly 9%, outpacing gold and international equity markets as they responded to intensifying global conflict. The brokerage suggested that this performance underscores how institutional ownership is transforming the market.

"We believe that the combination of Strategy’s treasury model and ETFs have altered bitcoin’s ownership structure," analysts led by Gautam Chhugani remarked in the Monday report.

Strategy, described by the analysts as functioning like a “bitcoin central bank of last resort,” has maintained its buying activity throughout the downturn. The firm continued its series of weekly acquisitions, obtaining approximately $1.57 billion worth of BTC, as per a Monday filing.

Led by Executive Chairman Michael Saylor, the company purchased 22,337 bitcoin at an average price of $70,194 each, raising its total holdings to 761,068 BTC acquired at an average cost of $75,696 per coin.

Strategy has also broadened its preferred equity financing approach through the STRC product, which provides investors with high-yield income tied to the Secured Overnight Financing Rate (SOFR) and has generated increasing trading volumes. This added liquidity facilitates further bitcoin acquisitions through at-the-market offerings.

In addition, spot bitcoin exchange-traded funds (ETFs) have garnered around $2.1 billion in inflows over the past three weeks, elevating ETF ownership to roughly 6.1% of the total bitcoin supply. The analysts noted that these vehicles are increasingly attracting allocations from wealth managers, pension funds, and sovereign investors.

Retail investors have been net sellers in recent months; however, long-term holders continue to dominate. Approximately 60% of the bitcoin supply has remained inactive for more than a year, indicating that many investors still regard the asset as a long-term store of value, the report stated.

Bitcoin’s recent outperformance amid geopolitical stress has reignited discussions regarding its role as “digital gold.” Although the asset lagged behind the precious metal for a significant portion of the past year, its gains during the recent period of global uncertainty have led some analysts to suggest the asset is starting to act more like a geopolitical hedge, although this comparison remains debated.

For equity investors, Bernstein noted that Strategy (MSTR) provides a high-beta method to gain exposure to bitcoin’s upside, currently trading at approximately a 14% discount to its bitcoin net asset value on a basic share basis.

The largest cryptocurrency was trading 4.4% higher at around $73,900 at the time of publication. Ether, the second-largest cryptocurrency by market capitalization, saw an increase of 8.4% to $2,273.

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