Grayscale has presented two scenarios for Bitcoin: the bottom of the cycle or a moderate correction.
Grayscale analysts have presented two likely scenarios for bitcoin, which depend on key macroeconomic and regulatory factors. In the base scenario, with the passage of the Clarity Act, the strengthening of Strategy's balance sheet, and the continuation of the current Federal Reserve monetary policy, the price of the leading cryptocurrency could be near its cyclical bottom. However, the negative scenario suggests further moderate declines.
Key Factors Pressuring the Market
This week, bitcoin updated its lows for the current cycle, falling below the $60,000 mark. From its all-time high of $125,000 recorded in October last year, the asset has lost more than 50%. Grayscale emphasizes that the current drawdown is another cyclical pullback within a long-term upward trend.
Analysts cite the shift in expectations regarding Fed policy as the main driver of pressure. At the end of last year, markets anticipated the appointment of a relatively "dovish" Kevin Hassett to head the agency, but President Donald Trump chose a more hawkish candidate, Kevin Warsh, who took office this month. Due to persistent inflation, markets are now pricing in a rate hike rather than a cut. For comparison, gold, which also competes with fiat currencies, has corrected approximately 25% from its highs — this is comparable to bitcoin's decline when adjusted for its traditional volatility.
In addition to monetary policy, the market is under pressure from uncertainty surrounding the passage of the Clarity Act, the strain on the leveraged balance sheet of Strategy (formerly MicroStrategy), and investor caution amid risks related to quantum computing for digital security.
Why Grayscale Remains Optimistic
Despite the current correction, the company's analysts highlight two paths out of the bear market. In the base scenario — Senate passage of the Clarity Act, strengthening of Strategy's balance sheet, and a pause in Fed rate hikes — bitcoin's price may already be near the bottom of the current cycle. In the negative scenario, with the opposite developments, a moderate further decline is possible.
Grayscale notes that in past cycles, bitcoin fell by about 80%, but this time the drawdown from peak to trough is unlikely to be as deep. The reason lies in a more restrained bull market and sustained institutional demand for digital assets. The company emphasizes that improvements in the regulatory environment continue to drive institutional blockchain adoption, while the CFTC's approval of the first perpetual futures in the U.S. and the growth of stablecoins support leading blockchains.
Grayscale remains optimistic about the medium- and long-term prospects of cryptocurrencies. Over the past ten years, this has been the best-performing asset class, and the company expects this result to repeat in the next decade. They describe the current bear market as an attractive entry point for investors with a long-term horizon.
My expert opinion: Grayscale's analysis underscores that the current correction is not a structural crisis but a cyclical pullback amid macroeconomic uncertainty. The key trigger for a reversal will be clarity in the regulatory environment and signals from the Fed. For investors with a 3–5 year horizon, current levels indeed look attractive, but in the short term, one should prepare for heightened volatility.