Bitcoin prediction: Grayscale is pushing back against predictions of a prolonged Bitcoin (BTC) price crash, suggesting that the cryptocurrency’s next rally could surpass previous records, as per a report.
According to the firm, Bitcoin has experienced drops of 10% or more roughly 50 times since 2010, making sharp declines a normal feature of its cycles.
The research team emphasized that investors often underestimate how common such moves are, even during strong cycles. Grayscale does not anticipate a drawn-out 2–3-year downturn similar to past cyclical declines.
ALSO READ: Record $8 trillion in US money-market funds: Why investors keep pouring in amid Fed rate cuts
Unlike earlier cycles, the current market has not seen a parabolic rally, which historically preceded multi-year crashes. This moderation, combined with evolving market participation, supports a more constructive outlook for 2025 and 2026.
However, Grayscale cautioned that short-term indicators remain mixed. Futures open interest has declined, and exchange-traded product flows were negative for most of November. On-chain data also showed a spike in Coin Days Destroyed, suggesting movement of older Bitcoin held by long-term investors.
According to Grayscale, a clearer bottom may require stabilization in flows, open interest, and a slowdown in selling by longstanding holders.
ALSO READ: Crypto gets the green light — BofA pushes 1–4% allocation for wealthy investors
Grayscale highlighted privacy as a growing theme for the next stage of digital asset utility, supported by new frameworks and Layer-2 developments.
Additionally, ongoing bipartisan efforts on crypto market-structure legislation could attract further institutional capital if progress continues, as per the Benzinga report.
More corporate treasuries, regulated exchange-traded products, and no parabolic rally so far reduce the risk of a prolonged crash.
How are institutional investors influencing Bitcoin?
Corporate treasuries and regulated ETFs are providing stability and reducing speculative exposure.
Why Bitcoin’s 32% Drop Is Part of a Normal Bull-Market Cycle
In its November market commentary, published Monday, Grayscale noted that Bitcoin’s recent 32% decline from its October peak is consistent with historical bull-market pullbacks, reported Benzinga.According to the firm, Bitcoin has experienced drops of 10% or more roughly 50 times since 2010, making sharp declines a normal feature of its cycles.
The research team emphasized that investors often underestimate how common such moves are, even during strong cycles. Grayscale does not anticipate a drawn-out 2–3-year downturn similar to past cyclical declines.
ALSO READ: Record $8 trillion in US money-market funds: Why investors keep pouring in amid Fed rate cuts
How Today’s Market Structure Differs from Past Bitcoin Cycles
The firm highlighted that the current market structure, influenced by exchange-traded products and corporate digital asset treasuries, differs from previous cycles and reduces the relevance of the traditional four-year price rhythm tied to Bitcoin halving events.Unlike earlier cycles, the current market has not seen a parabolic rally, which historically preceded multi-year crashes. This moderation, combined with evolving market participation, supports a more constructive outlook for 2025 and 2026.
Signs BTC USD Could Be Nearing a Market Bottom
Grayscale also pointed to hedging activity and on-chain signals as potential signs of a bottoming effort. Bitcoin put-option skew remains elevated across three- and six-month tenors, indicating active downside hedging, a pattern historically observed near market lows.However, Grayscale cautioned that short-term indicators remain mixed. Futures open interest has declined, and exchange-traded product flows were negative for most of November. On-chain data also showed a spike in Coin Days Destroyed, suggesting movement of older Bitcoin held by long-term investors.
According to Grayscale, a clearer bottom may require stabilization in flows, open interest, and a slowdown in selling by longstanding holders.
ALSO READ: Crypto gets the green light — BofA pushes 1–4% allocation for wealthy investors
Digital Asset Treasuries Trading at Discounts
The firm noted that major digital asset treasuries are trading at discounts to their net asset values, reflecting reduced speculative exposure.Privacy Coins Outperform: Zcash, Monero, and Decred Lead the Gains
Meanwhile, privacy-focused cryptocurrencies outperformed the broader market in November. Zcash (ZEC), Monero (XMR), and Decred (DCR) posted double-digit gains, driven by increased developer activity around privacy tools on the Ethereum ecosystem.Grayscale highlighted privacy as a growing theme for the next stage of digital asset utility, supported by new frameworks and Layer-2 developments.
SEC-Compliant ETFs Expand Institutional Access to Major Cryptos
The firm also noted that XRP and Dogecoin exchange-traded products began trading under new SEC listing standards, expanding institutional access to large-cap tokens and broadening the universe of regulated products.Macroeconomic Factors Likely to Support Bitcoin Through 2026
Looking ahead, Grayscale said the macroeconomic backdrop may continue to support crypto through 2026. Investors are watching the Federal Reserve’s December 10 meeting for a potential rate cut, which could lower real interest rates, weigh on the US Dollar, and support alternative assets like Bitcoin.Additionally, ongoing bipartisan efforts on crypto market-structure legislation could attract further institutional capital if progress continues, as per the Benzinga report.
FAQs
What makes this Bitcoin cycle different from previous ones?More corporate treasuries, regulated exchange-traded products, and no parabolic rally so far reduce the risk of a prolonged crash.
How are institutional investors influencing Bitcoin?
Corporate treasuries and regulated ETFs are providing stability and reducing speculative exposure.
