Grayscale: Bitcoin's Bottom Is Already In—If the Fed Cooperates 🪙

Bitcoin's bear market may already be over, but only if the Federal Reserve does not raise interest rates, according to a research note published Wednesday by crypto asset manager Grayscale. Head of research Zach Pandl framed the market as a tug-of-war between two competing narratives: the long-standing "four-year cycle" theory and a newer view of Bitcoin as a macro-sensitive asset that trades like gold or a rate-sensitive tech stock.

Pandl dismissed the four-year cycle view, which ties Bitcoin's price swings to the roughly quadrennial halving events that cut mining rewards in half. Under that model, "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%," Pandl wrote. Such a path would imply a bottom "in September or October" and, based on Bitcoin's current price near $65,000, a roughly 15% drop from current levels, with some chart work pointing toward $50,000. 21Shares, which had predicted the four-year cycle would be over by now, conceded in June that "price action still looks familiar," and CryptoQuant put the true bear market floor at $55,000 in February, based on realized price at the time.

Pandl's alternative thesis is that Bitcoin has matured. He noted that past bear markets coincided with slowing economic growth and rising real interest rates, and that "the current bear market has also featured a major shift in Fed policy expectations and rising real interest rates." His conclusion: "Naturally, if macro factors are in the driver's seat, Bitcoin's price could bottom when these macro factors turn around." Bitcoin, though, already has a partial bounce built in—climbing more than 10% from an early-July low of $57,717, while spot ETFs have logged nearly $1 billion in net inflows over seven straight sessions.

The macro backdrop shaping that call is the nomination of Kevin Warsh as Fed chair, a hawkish pick that rattled the debasement trade that had fueled Bitcoin's bull run and helped send BTC briefly below $58,000 in early July. Bitcoin peaked at around $126,000 in October 2025 and remains roughly 49% below that level, even after the recent rebound. Whether the bottom holds now rests on whether the Fed pivots before the four-year cycle bears finish their script.