Despite the recent continuous sell-off of Bitcoin and the onset of a new market winter, the underlying infrastructure supporting the cryptocurrency market has not collapsed, providing confidence support for bullish investors.
Unlike previous cycles, the current market mechanism is functioning well. Cryptocurrency exchanges are operating normally, custodians maintain good solvency, and many U.S. banks are actively developing cryptocurrency products, effectively avoiding a repeat of systemic collapse.
The resilience of the funding environment further limits the downside risk in the market. According to Bloomberg, despite concerns about ETF fund outflows, most assets remain entrenched in the market, institutional buyers are holding their ground, and there has been no panic exit from the market.
Against the backdrop of a well-functioning underlying institutional framework, market observers remain optimistic about the future performance of cryptocurrencies. Gautam Chhugani, a senior analyst at Bernstein Global Digital Assets, believes in a report that the current stock price trend is merely a crisis of confidence.
<h2>Infrastructure Resilience Emerges, Supply Contraction Reshapes Rebound Mechanism</h2>
Looking back at the industry winter of 2022, the cryptocurrency infrastructure collapsed as prices plummeted, with well-known institutions like FTX, Celsius, BlockFi, and Three Arrows falling like dominoes. However, in this sell-off wave, such systemic collapses have not occurred. The significant improvement in market mechanisms not only ensures smooth trading and custody but also promotes the purchasing power of long-term holders over the past year. Additionally, Circle's strong earnings report further confirms that the underlying institutional framework remains intact.
In addition to the continued support from institutional buyers and hedge funds, the underlying supply and demand structure of Bitcoin is also undergoing substantial changes. According to Bloomberg, Bitcoin ETF assets have been steadily held by investors during the price decline, while the free trading supply of Bitcoin has begun to decrease.
This structural change alters the physical mechanism of potential recovery: if market sentiment shifts, buying pressure will be transmitted through narrower channels than before, and this contracted supply is expected to generate greater force for a market rebound.

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Despite the sell-off of Bitcoin, the underlying infrastructure has not collapsed: exchanges are operating normally, custodians have good solvency, institutional buyers are holding their ground, Bitcoin ETF assets are being held steadily, and the supply available for free trading has decreased. Bernstein analysts believe that this is merely a "crisis of confidence."

- Despite ongoing sell-offs and a new market winter for Bitcoin, the underlying infrastructure supporting the cryptocurrency market remains intact, providing confidence for bullish investors.  
- Unlike previous cycles, the current market mechanisms function smoothly, with operational exchanges and capable custody firms, while U.S. banks develop crypto products, preventing systemic collapse.  
- Analysts stay optimistic about future cryptocurrency performance, noting that institutional investors are holding firm and a structural shift in supply could enhance recovery potential.

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This time, the cryptocurrency winter did not collapse the underlying infrastructure