Grayscale’s research team, led by Head of Research Zach Pandl, has weighed in on one of the most debated questions in the market: when will the Bitcoin bear market end?
Two competing views
According to the note, market participants tend to fall into two camps.
The first group leans on the four-year cycle theory, which treats Bitcoin halving events as the main driver of price movements.
Grayscale summarized the historical pattern:
“Historically, Bitcoin’s price has bottomed about a year after the cyclical peak and roughly 2.5 years after the halving event. Cumulative drawdowns have averaged ~80%.”
Under that framework, the firm noted:
“The four-year cycle theory implies that Bitcoin’s price could fall further, with a bottom in September or October.”
The macro argument
The second perspective is that Bitcoin has matured into a full-fledged asset class, meaning its price now moves with the broader macro backdrop.
Grayscale pointed to prior downturns as evidence:
“Bitcoin bear markets in the past have corresponded with slowing economic growth and/or rising real interest rates.”
The firm added that the current selloff fits this mold, featuring “a major shift in Fed policy expectations and rising real interest rates.”
Where Grayscale lands
The research team made its position clear, siding firmly with the macro view.
They wrote:
“If the Fed forgoes rate hikes and economic growth holds up well, Bitcoin’s price may already have bottomed.”
The key distinction, per Grayscale, is that the cycle view predicts lower lows ahead, while the macro lens suggests the worst could be over.
The firm’s outlook now hinges largely on how the Federal Reserve handles interest rates and whether economic growth remains resilient.
