The research head said the bear market’s end may hinge less on the traditional four-year cycle than on Federal Reserve policy, economic growth, progress on the CLARITY Act and Strategy’s balance sheet.
Bitcoin has fallen more than 50% from its $125,000 cycle peak, but Grayscale research head Zach Pandl said the cryptocurrency may already have reached a bottom if the Federal Reserve stops raising interest rates and economic growth remains stable. Grayscale has outlined two competing ways to judge when the bear market ends: a traditional four-year cycle model, under which Bitcoin has historically bottomed about a year after its peak and roughly two and a half years after each halving, and a macro-driven framework focused on growth, real interest rates and Fed policy. Pandl said he favors the macro view because Bitcoin increasingly trades like a mature asset shaped by broader market conditions. Grayscale said the cycle model points to possible further downside into September or October, while also arguing that the current decline may be less severe than prior bear markets because institutional participation is stronger. The asset manager also said Bitcoin’s path depends on whether the CLARITY Act advances, whether the Fed avoids additional hikes and whether Strategy’s financial position improves. In a July 6 report, Grayscale said Strategy’s sale of 3,588 Bitcoin for about $216 million strengthened its balance sheet by lifting its dollar reserve to about $2.55 billion, reducing concerns that the company could become a forced seller during market stress.