Foreign media: In its latest market commentary, Grayscale stated that whether Bitcoin is nearing the bottom of this cycle primarily depends on three factors: the progress of U.S. legislation on digital asset market structure, Strategy’s financial condition, and whether the Federal Reserve continues to tighten policy.
In Grayscale’s base case scenario, the CLARITY Bill passes smoothly through the Senate, Strategy’s balance sheet pressures ease, and the Federal Reserve holds interest rates steady. If all three conditions are met, the current price range may already be near the low point of this cycle. Conversely, if these risks continue to unfold, Bitcoin could still decline further.
The CLARITY Act is still pending a vote.
Grayscale believes that regulatory legislative progress remains a key factor influencing market sentiment. The CLARITY Act aims to establish federal-level market structure rules for digital assets, defining regulatory responsibilities among trading platforms, developers, and token issuers.
Although the bill has been approved at the committee stage and added to the Senate agenda, it still needs to undergo full chamber consideration, amendment processing, and secure 60 votes in support. The report notes that coordination is still needed between the Senate Banking Committee and the Agriculture Committee, and key issues—including conflict-of-interest provisions, stablecoin regulations, anti-money laundering clauses, and voting timelines—have not yet been fully resolved.
Expectations of interest rate hikes are suppressing risk appetite.
Grayscale lists the Federal Reserve as the second major risk. The report cites recent market expectations that, if inflation remains high, the Fed could raise rates as early as September 2026. Additional projections indicate that the Fed’s June update to its rate outlook has become more hawkish than previously, with some officials now anticipating a potential rate hike before year-end.
For Bitcoin, higher interest rates mean lower appeal for interest-free assets. After the U.S. dollar strengthened and real yields rose, cash and U.S. Treasuries became more attractive to some capital. This year, both Bitcoin and gold have faced pressure in the environment of a strong dollar and high interest rates.
Strategy becomes a risk observation point
In addition to policy and interest rates, Grayscale also views Strategy as one of the current market risk indicators. Previously, reports indicated that after Bitcoin fell below $60,000, the book value of Bitcoin held by Strategy once dropped approximately $12 billion below its cost basis, and its stock price fell below the value of the Bitcoin it holds.
Another analysis suggests that as the stock premium narrows and financing becomes more difficult, the company’s “Bitcoin flywheel” effect is weakening. If digital asset treasury companies continue to deleverage, the scope of market pressure could expand.
Grayscale does not expect this cycle to replicate the historical ~80% bear market drawdown. The article suggests that Bitcoin’s next moves will largely depend on whether three factors improve: progress on legislation, stable interest rates, and stabilization of Strategy’s financial condition. If these factors move in the opposite direction, the market could still see moderate downside.