Grayscale Research identified two paths out of the Bitcoin bear market on June 26, as the cryptocurrency fell below $60,000 following a decline of more than 50% from its peak near $125,000 in October. The pullback followed President Donald Trump's selection of Kevin Warsh to lead the Federal Reserve, a choice that shifted market expectations toward the possibility of rate hikes amid elevated inflation. Grayscale Head of Research Zach Pandl stated the firm's base case depends on Senate progress on the CLARITY Act, balance-sheet action from Strategy, and no additional Fed rate hikes, with the firm noting that regulatory developments and institutional blockchain adoption continue beneath short-term price weakness.
Bitcoin Falls Below $60,000 as Fed Policy Shifts
Bitcoin's move below $60,000 renewed debate over whether the market is nearing exhaustion or facing another leg lower. Grayscale Research noted June 26 that bitcoin is now down more than 50% from its peak near $125,000 in October.
The pullback has been driven in part by a changed interest-rate backdrop. Grayscale said expectations shifted after President Donald Trump selected Kevin Warsh, seen as more hawkish, over Kevin Hassett. With Warsh now leading the Federal Reserve and inflation still elevated, markets have moved toward the possibility of rate hikes.
Zach Pandl, Grayscale Head of Research, stated: "We see two ways out of the Bitcoin bear market."
CFTC Approves First Perpetual Futures Products for U.S. Markets
Regulation remains a key offset for the market, with Grayscale pointing to recent Commodity Futures Trading Commission (CFTC) approval of the first perpetual futures products for U.S. markets. The firm also highlighted stablecoin growth and tokenized assets as signs that blockchain adoption is continuing beneath the short-term price weakness.
At the same time, several risks weigh on sentiment. Grayscale cited uncertainty over the CLARITY Act, concerns about Strategy's leveraged balance sheet, and investor unease around quantum-computing security. The firm also noted gold's sharp pullback, suggesting bitcoin's decline reflects a broader repricing of assets tied to fiat debasement concerns.
Grayscale Identifies Base Case Conditions for Cycle Bottom
Pandl described: "Whether bitcoin's price has reached its cyclical low point depends on upcoming catalysts, including Fed rate decisions and progress on the CLARITY Act in the US Senate."
Grayscale's base case hinges on Senate progress on the CLARITY Act, balance-sheet action from Strategy, and no additional Fed rate hikes. If those conditions hold, the firm said bitcoin may already be near its cycle bottom.
The longer-term case centers on adoption. Grayscale said public blockchains continue to benefit from institutional use, stablecoin growth, tokenization, and broader trends supporting alternatives to traditional financial infrastructure.
"The current bear market offers a compelling opportunity for investors with longer term horizons to position for structural growth in public blockchain technology and digital asset valuations over the coming decade," Grayscale said, concluding: "Grayscale Research remains incredibly optimistic about the medium- and long-term outlook for the crypto asset class. It was the best performing asset class over the last ten years, and we think it will be again over the next ten years."
FAQ
What did Grayscale say about Bitcoin on June 26?
Grayscale Research stated on June 26 that it sees two paths out of the Bitcoin bear market, as the cryptocurrency fell below $60,000 following a decline of more than 50% from its peak near $125,000 in October.
What are the conditions for Grayscale's base case on Bitcoin's cycle bottom?
Grayscale's base case hinges on Senate progress on the CLARITY Act, balance-sheet action from Strategy, and no additional Federal Reserve rate hikes.
What regulatory development did Grayscale highlight for the crypto market?
Grayscale pointed to recent Commodity Futures Trading Commission (CFTC) approval of the first perpetual futures products for U.S. markets as a key regulatory development.
