Grayscale: Bitcoin May Have Found a Floor If Fed Pauses Rate Hikes

Grayscale’s head of research, Zach Pandl, says Bitcoin’s worst may already be behind it — but only if the Federal Reserve stops raising interest rates. Bitcoin has plunged more than 50% from its $125,000 cycle peak, and Grayscale Research laid out two competing frameworks for when the current bear market could end. One follows Bitcoin’s historical four-year cycle and halving timetable; the other ties the bottom to macroeconomic conditions like GDP growth, real interest rates and Fed policy. Pandl prefers the macro view, arguing Bitcoin increasingly behaves like a mature, macro-sensitive asset. Under Grayscale’s macro framework, stable economic growth and a Fed pause on rate hikes could allow the recent low to hold, meaning Bitcoin may already have found a floor. “Bitcoin is a macro asset and it trades with macro variables,” Pandl summarized — if the Fed stops tightening, further large declines become less likely. The cycle-based model is less optimistic. Historically, Grayscale notes, Bitcoin bottoms roughly one year after a cycle peak and about 2.5 years after each halving, with past bear markets producing average drawdowns near 80%. Following that pattern would point to the potential for more selling and a bottom later in the year (Grayscale flags September or October). An 80% drop from the $125,000 high would put prices well below the recent sub-$60,000 range. Grayscale doesn’t believe the present downturn will fully mirror past collapses, largely because institutional participation is stronger now than in earlier cycles. That increased institutional presence, the firm says, makes macro conditions a better guide to Bitcoin’s path than halving history alone. Pandl and Grayscale also outline three key variables that will shape Bitcoin’s ability to secure a durable cycle low: 1) the Fed’s policy path, 2) progress on the CLARITY Act (federal market-structure legislation for digital assets), and 3) the financial health of a major corporate holder identified in Grayscale’s research as “Strategy.” Their base case assumes the CLARITY Act advances in the Senate, the corporate holder bolsters its balance sheet, and the Fed halts further hikes. The corporate sale Grayscale referenced — 3,588 BTC sold for roughly $216 million — is viewed not as distress but as balance-sheet management. Grayscale calculates the proceeds increased that company’s dollar reserve to about $2.55 billion, enough to cover nearly 17 months of preferred-share dividends under its then-current obligations. The report argues this reduces the likelihood of forced Bitcoin sales during market stress and therefore helps dampen one important source of downside risk. Still, Pandl warned of the downside scenario: if inflation stays high and the Fed raises rates again, if the CLARITY Act stalls in the Senate, or if digital-asset treasuries keep deleveraging, Bitcoin could fall further. The CLARITY Act has cleared committee and reached the Senate calendar but still faces floor debate, potential amendments and a 60-vote threshold to pass — so the policy risk remains nontrivial. Short-term price action has already reflected these dynamics. Spot ETF outflows and leveraged liquidations intensified the selloff when Bitcoin dipped under $60,000, while the corporate BTC sale initially pushed prices toward $61,000 before recovering above $63,000 — a move Grayscale said could signal less fear of forced selling from a major holder. Bottom line: Grayscale’s split-framework approach gives two paths. If the Fed pauses and macro conditions stay stable, Bitcoin’s recent low may prove durable. If policy tightens again or political and corporate balance-sheet risks materialize, a deeper drawdown consistent with historical cycle patterns remains possible.