Grayscale Sees Bitcoin Hitting New Highs in 2026, Rejects Cycle Theory
Grayscale Research challenges the widespread perception in Bitcoin’s four-year cycle idea, arguing the crypto will doubtless attain new highs in 2026 regardless of the latest 30% drawdown since early October.
The asset supervisor’s newest evaluation contends that Bitcoin’s present market construction, dominated by exchange-traded merchandise and company treasuries fairly than retail exchanges, essentially differs from earlier cycles and received’t observe historic patterns of deep, extended declines.
The report comes as Bitcoin checks vital assist ranges beneath $90,000, with Strategy’s unprecedented resolution to determine a $1.44 billion cash reserve.
While institutional gamers, together with BlackRock, Vanguard, and JPMorgan, liquidated $5.38 billion in Strategy shares throughout Q3, enterprise capital poured a file $14.48 trillion into crypto tasks in November alone.
Market Dynamics Signal Potential Bottom Formation
Bitcoin’s newest pullback aligns with historic averages regardless of showing extreme to newer market members.
The crypto has skilled roughly 50 drawdowns of a minimum of 10% since 2010, with a median peak-to-trough decline of 30%, almost matching the present 32% drop from latest highs.
Since bottoming in November 2022, Bitcoin has declined by a minimum of 10% on 9 events, making this the ninth significant pullback throughout the newest bull market.
Grayscale distinguishes between “cyclical drawdowns” lasting 2-3 years and “bull market drawdowns” averaging 25% over 2-3 months, categorizing the present state of affairs because the latter.
Several technical indicators counsel capitulation could also be full. Bitcoin put possibility skew has reached elevated ranges throughout 3- and 6-month tenors, indicating in depth hedging of draw back danger.
CryptoQuant data reveals that on-chain merchants, these holding Bitcoin between one and three months, are experiencing their largest proportion lack of this cycle, with a realized value of $113,692 representing 20-25% losses over two weeks.
These phases have traditionally been related to the formation of bottoms, as merchants finally select between promoting and holding.
Meanwhile, accumulation patterns proceed amongst massive holders. One whale purchased 2,612 Bitcoin price $227 million over the previous week, whereas main company treasuries commerce at reductions to the web asset worth of their Bitcoin holdings.
However, futures open curiosity declined additional in November, and exchange-traded product flows remained unfavorable till late in the month, suggesting demand restoration stays incomplete.
A spike in Coin Days Destroyed throughout late November indicated one other spherical of promoting by longtime holders, just like exercise noticed in July.
Strategy’s Reserve Triggers Sector-Wide Concerns
Strategy’s announcement essentially alters the company Bitcoin accumulation narrative that drove markets all through 2025.
The firm now holds 650,000 Bitcoin, roughly 3.1% of the overall 21 million provide, however its market capitalization of $49.26 billion falls beneath the worth of its $55.9 billion Bitcoin holdings.
CEO Phong Le confirmed that the reserve presently covers 21 months of dividend and curiosity funds, totaling roughly $689 million yearly, and is funded by frequent inventory gross sales.
The firm carries $8.2 billion in debt and $800 million in annual most popular dividends, whereas its software program enterprise faces continued money circulate challenges.
“Establishing a USD Reserve to enrich our BTC Reserve marks the following step in our evolution,” Michael Saylor acknowledged, including the transfer would assist navigate short-term volatility whereas delivering on the imaginative and prescient of turning into the world’s main issuer of digital credit score.
The firm up to date its fiscal 2025 steering, projecting working earnings between a lack of $7 billion and a acquire of $9.5 billion primarily based on year-end Bitcoin costs starting from $85,000 to $110,000.
The shift comes amid mounting strain forward of MSCI’s January 15, 2026, decision on whether or not to exclude corporations that maintain greater than half their belongings in cryptocurrency from international indices.
JPMorgan estimates this might set off compelled institutional promoting between $2.8 billion and $8.8 billion, affecting entities collectively holding over $137 billion in digital belongings and roughly 5% of all Bitcoin in existence.
Speaking with Cryptonews, Farzam Ehsani, CEO of VALR, warned that Bitcoin might check the $60,000-$65,000 vary if market declines proceed.
However, restoration might start as soon as Strategy resolves regulatory issues and index corporations make clear their positions.
“Strategy is a key participant in the crypto market, and its potential issues might trigger Bitcoin’s value to drop by one other 30%,” Ehsani acknowledged.
Ray Youssef, CEO of NoOnes, additionally cautioned that they’re seeing file enterprise capital inflows, which means establishments are accumulating the lows.
“Selling BTC to retail buyers at $200,000 per coin is an interesting concept,” Youssef acknowledged, suggesting main belongings might expertise delayed value restoration in Q1 2026 following profitable market institutionalization.
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