Grayscale: Bitcoin's Bear May Be Over if Fed Pauses Rate Hikes

Headline: Grayscale says Bitcoin’s bear may already be over — if the Fed holds off on more hikes Grayscale’s head of research, Zach Pandl, argues in a new note that Bitcoin’s bear market might be over — but only if the Federal Reserve stops raising interest rates. Pandl frames the debate as two competing narratives that lead to very different near-term outcomes for BTC. The “four‑year cycle” story - This view centers on Bitcoin’s halving cadence, which historically lines up with multi-year bull and bear cycles. Believers expect Bitcoin to mirror past patterns and see further downside ahead. - Under that model, a bottom could arrive in September or October, implying roughly a 15% drop from today’s ~$65,000 price — and charts could head toward the low $50,000s. Historically, Pandl notes, Bitcoin bottoms roughly a year after the cyclical peak and about 2.5 years after a halving, with cumulative drawdowns averaging about 80%. - Market signals that echo the four‑year story: a weakening monthly bearish trend that could persist, and past calls such as CryptoQuant’s February estimate putting a bear‑market floor near $55,000. Even 21Shares, which expected the cycle to be over by now, admitted in June that “price action still looks familiar.” The macro/rates story (Grayscale’s preferred view) - Pandl’s alternative is that Bitcoin has evolved into an asset that behaves more like gold or a rate‑sensitive tech stock than a purely speculative retail play. - Where past bear markets coincided with slowing growth and rising real interest rates, the current decline also tracks a major shift in Fed policy expectations and higher real rates. If macro forces are driving price action, the bottom could arrive the moment those forces reverse. - Supporting facts: Bitcoin peaked near $126,000 in October 2025 and remains about 49% below that high. The nomination of Kevin Warsh to the Fed chair role — a hawkish signal — helped trigger the selloff that knocked BTC briefly below $58,000 in early July. Since that low of $57,717, Bitcoin has rallied more than 10%, and spot Bitcoin ETFs have recorded nearly $1 billion in net inflows across seven straight sessions. Wildcard: the Clarity Act - A proposed market‑structure bill that would split crypto oversight between the SEC (securities and investment products) and the CFTC (commodity derivatives) could be another catalyst. If the Clarity Act advances in the Senate and becomes law, many market participants expect it would be bullish for Bitcoin and the broader crypto market. Bottom line from Grayscale - The four‑year cycle camp predicts lower lows; the macro perspective suggests the bottom might already be in — particularly if the Fed pauses hikes and economic growth holds. - Near‑term movers: Bitcoin is down slightly today versus yesterday but is up roughly 4% over the past 30 days. The Fed’s next rate decision comes in six days and could be the decisive catalyst.