Bitcoin Bear Market May Be Closer to End Than Expected

Grayscale's head of research, Zach Pandl, suggests that Bitcoin's bear market may be closer to its end than traditional trading patterns indicate. According to Grayscale, macroeconomic conditions are becoming more important in determining the cryptocurrency's price than its four-year cycle.

Pandl outlined two competing views on when the downturn could bottom out. The first view treats Bitcoin's halving schedule as the primary driver of its boom-and-bust pattern. Based on this framework, previous bear markets have generally reached their lowest point about one year after a cycle peak and roughly two and a half years after a halving.

Under this model, Bitcoin may have further to fall before reaching a bottom in September or October. This view assumes that the current decline will broadly follow earlier cycles, exposing the market to lower prices before a sustained recovery begins.

However, Grayscale believes that relying on past cycles has become more difficult due to changes in the investor base and market structure. Institutional funds, listed investment products, and changing monetary conditions now play a larger role in determining demand.