70% of Institutions Say Bitcoin is Undervalued Despite 30% Crash – Bitcoin About to Rally?
Most institutional traders stay bullish on Bitcoin regardless of brutal fourth-quarter volatility that erased practically a 3rd of the asset’s worth from current peaks.
A brand new Coinbase Institutional and Glassnode survey discovered 70% of establishments view BTC as undervalued, even after the token dropped from above $125,000 in early October 2025 to commerce round $90,000 by year-end, whereas 60% of non-institutional traders share that conviction.
The findings come from a quarterly ballot of 148 world traders, break up between 75 establishments and 73 non-institutions, performed between December 10, 2025, and January 12, 2026.
Despite the October liquidation event that shook altcoin markets and compressed leverage throughout derivatives platforms, most respondents held or added to crypto positions slightly than retreating.
Around 62% of establishments and 70% of non-institutions both maintained present allocations or elevated internet lengthy publicity since October.
Bearish Sentiment Rises, But Doesn’t Dominate Positioning
Perceptions of the market cycle shifted noticeably in the course of the quarter.
Around 26% of establishments and 21% of non-institutions now consider crypto has entered the bear-market markdown section, up sharply from simply 2% and seven%, respectively, within the prior survey.
That shift exposes the burden of October’s deleveraging occasion, which noticed the Altcoin Season Index plummet and mid-cap tokens battle to get better their third-quarter features regardless of the launch of a number of spot altcoin ETFs within the US.
Still, the uptick in bearish views didn’t translate into widespread promoting. Most traders caught with their positions, and sentiment towards Bitcoin particularly remained constructive.
“We have a constructive view for 1Q26,” Coinbase Global Head of Research David Duong wrote within the report. “We consider that crypto markets are coming into 2026 in a more healthy state, with extra leverage having been flushed from the system in This autumn.“
Bitcoin dominance held comparatively regular by means of the turbulence, rising solely marginally from 58% to 59% over the quarter, an indication that institutional capital continued to favor the most important digital asset at the same time as smaller tokens confronted sustained promoting stress.
Open curiosity in BTC choices overtook perpetual futures as market members sought draw back safety, with the 25-day put-call skew staying constructive throughout 30-day, 90-day, and 180-day expiries.
Coinbase Survey Points to Macro Support and Policy Progress
Several components underpinned the optimistic outlook. Inflation held regular at 2.7% in December’s Consumer Price Index studying, and the Atlanta Fed’s GDPNow mannequin projected strong 5.3% actual GDP progress for the fourth quarter as of January 14.
While the longer term path of financial coverage remained unsure, Duong mentioned the agency nonetheless expects the Federal Reserve to ship two fee cuts totaling 50 foundation factors at the moment priced into Fed funds futures, “which ought to present a tailwind for threat belongings broadly and crypto particularly.“
Questions about complete crypto market construction laws persist, however confidence in eventual regulatory readability stayed agency.
“We’re assured that we’ll ultimately see a set of guidelines that permits the business to attain its full potential,” the report acknowledged, noting that main coverage progress within the US, significantly across the proposed CLARITY Act, might increase investor sentiment additional.
Beyond the survey, separate information exhibits institutional engagement deepening throughout channels.
Crypto allocations by monetary advisors hit 32% in 2025, up from 22% a yr earlier, as Bitcoin reached new highs and US guidelines moved nearer to the mainstream, a @BitwiseInvest survey confirmed. #DigitalAssets #WealthManagement https://t.co/dCIdMFRG7I
— Cryptonews.com (@cryptonews) January 14, 2026
A current Bitwise and VettaFi ballot discovered 32% of financial advisors allocated to crypto in client accounts during 2025, up from 22% in 2024, with registered funding advisors main at 42%.
Similarly, a separate Coinbase survey found that youthful US traders now allocate 25% of their portfolios to non-traditional belongings, in contrast with 8% amongst older cohorts.
Risks Remain, But Long-Term Trajectory Holds
The Coinbase report acknowledged headwinds. While the economic system seems strong, the roles market cooled in 2025, with the US including simply 584,000 positions, down from 2 million in 2024, partly due to elevated AI adoption.
Geopolitical tensions have flared in a number of areas, and any escalation that disrupts vitality markets might dampen investor urge for food.
“A significant uptick in inflation, a spike in vitality costs, or a big flare up of geopolitical tensions might warrant a extra cautious method to threat belongings,” the report warned.
Still, onchain metrics improved after October’s shakeout. Bitcoin provide moved inside three months, surged 37% within the fourth quarter, whereas cash unmoved for over a yr fell 2%, indicating short-term distribution that possible cleared weaker palms.
Ethereum’s Net Unrealized Profit/Loss ratio swung sharply by means of 2025, hitting capitulation within the first quarter, then rising to optimism within the third quarter, and settling again into concern territory by year-end.
Despite current ETF outflows totaling $1.62 billion over 4 buying and selling days and Bitcoin slipping below $90,000, institutional conviction seems sturdy. As Duong put it, “crypto markets are coming into 2026 in a more healthy state.”
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