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Bernstein: Bounce in Cryptocurrencies Is ‘Mean Reversion’ Rally
The gains are unlikely to foreshadow a sustained advance, a report from the brokerage firm said.
By Will Canny
Updated Jan 23, 2023, 8:03 p.m. Published Jan 23, 2023, 12:45 p.m.
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Gains in the crypto market have probably been driven by a reversion to the mean, Bernstein said in a research report Monday, noting that bitcoin (BTC), the largest cryptocurrency by market capitalization, fell more than 65% last year. Mean reversion is a theory used in finance that suggests asset prices tend to revert to their long-term mean or average level.
According to Bernstein, the mean reversion of crypto still has room to run, and so the broker advises caution about being bearish at current levels. Bitcoin in its entire history has never had two consecutive years of negative returns, it added.
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Although the implosion of crypto exchange FTX and the bankruptcy filing of crypto lender Genesis has been negative, “the potential overhang on the liquid crypto markets has receded,” the report said. Much of the expected selling pressure has been in illiquid private crypto assets, it said.
The risk of an immediate sell-off in the Grayscale Bitcoin Trust (GBTC) has also receded as creditors and Digital Currency Group, which owns Grayscale, Genesis and CoinDesk, negotiate a settlement, and with all the relevant situations now under court settlement, the “public crypto markets seem to have felt some relief from any forced selling narratives.”
It is unlikely, however that this is the start of a sustained rally, because this is more “capital internal to crypto (sidelined stablecoins) being deployed,” analysts Gautam Chhugani and Manas Agrawal wrote. “We have not yet seen any new capital allocations to sustain this rally.”
Regulatory news from Hong Kong, which is looking to allow crypto trading licenses for some assets, has also contributed to positive sentiment in the crypto market, the note added.
Read more: First Mover Asia: Bitcoin Surges Past $23K Before Retreating
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KuCoin captured a record share of centralised exchange volume in 2025, with more than $1.25tn traded as its volumes grew faster than the wider crypto market.
What to know:
- KuCoin recorded over $1.25 trillion in total trading volume in 2025, equivalent to an average of roughly $114 billion per month, marking its strongest year on record.
- This performance translated into an all-time high share of centralised exchange volume, as KuCoin’s activity expanded faster than aggregate CEX volumes, which slowed during periods of lower market volatility.
- Spot and derivatives volumes were evenly split, each exceeding $500 billion for the year, signalling broad-based usage rather than reliance on a single product line.
- Altcoins accounted for the majority of trading activity, reinforcing KuCoin’s role as a primary liquidity venue beyond BTC and ETH at a time when majors saw more muted turnover.
- Even as overall crypto volumes softened mid-year, KuCoin maintained elevated baseline activity, indicating structurally higher user engagement rather than short-lived volume spikes.
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Gold tops $5,000 as bitcoin stalls near $87,000 in widening macro-crypto split: Asia Morning Briefing
Bitcoin’s onchain data points to supply overhang and weak participation, while gold’s breakout is priced by markets as a durable macro regime shift.
What to know:
- Gold’s surge above $5,000 an ounce is increasingly seen as a durable regime shift, with investors treating the metal as a persistent hedge against geopolitical risk, central bank demand and a weaker dollar.
- Bitcoin is stuck near $87,000 in a low-conviction market, as on-chain data show older holders selling into rallies, newer buyers absorbing losses and a heavy supply overhang capping moves toward $100,000.
- Derivatives and prediction markets point to continued consolidation in bitcoin and sustained strength in gold, with thin futures volumes, subdued leverage and weak demand for higher-beta crypto assets like ether reinforcing the cautious tone.
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