"Bitcoin’s fundamentals remain solid despite price action... institutional inquiries persist"

Despite Bitcoin’s (BTC) sharp sell-off, some are pointing to greater regulatory clarity and expanding institutional demand as reasons to argue that “unlike the price, the fundamentals have not been impaired.”

On the 5th (local time), Sydney Powell, CEO of Maple Finance, said in an interview with CNBC that “the market is in a risk-management phase,” adding, “We’ve already seen multiple margin calls, but fortunately most institutional borrowers have been meeting them diligently, so we don’t see immediate large-scale counterparty risk.” Counterparty risk refers to the risk in a financial transaction that the contractual counterparty is unable to fulfill promised obligations such as settlement due to bankruptcy or default.

Still, he left the door open to further downside on the price front. “Multiple factors are working at the same time to push prices lower,” he said, adding that “the market is also talking about the possibility of a pullback of up to 70% from the peak.” That implies a scenario in which Bitcoin could slide to the $38,000–$40,000 range.

As the direct trigger for the latest plunge, he cited a confluence of macro shocks. “The Federal Reserve’s hawkish stance has pushed back expectations for rate cuts, and that coincided with a correction in artificial intelligence (AI)-related tech stocks,” he said. “On top of that, a chain reaction of liquidations in leveraged positions amplified the downward pressure.”

Regarding remarks circulating in parts of the market about Michael Saylor’s Strategy earnings announcement or the U.S. Treasury Secretary’s comments related to the “Clarity Act,” he said, “A significant portion was already priced in,” adding that “the Clarity Act discussion itself is, if anything, a positive signal over the medium to long term.”

On concerns that a sharp price drop could threaten stability across the ecosystem, he said, “Digital-asset treasury companies could face some pressure from mark-to-market losses on their holdings,” adding, “Some of them have served as a vehicle for retail investors’ indirect exposure in the first place, so it’s true the burden has increased.”

He was relatively upbeat about miners and infrastructure companies. “A number of mining firms are already shifting their business portfolios toward areas such as AI data centers,” he said, adding that “the move to break away from a model reliant solely on mining is accelerating.”

He stressed that “unlike the price, the industry fundamentals felt on the inside are still strong.” Powell said, “Institutional inquiries about entering the space haven’t declined, and expectations for regulatory clarity through the Clarity Act this year also remain intact,” adding that “JPMorgan showing interest in Bitcoin-backed lending is in the same context.”

He also assessed comments by some venture capital figures about potentially exiting the crypto market, saying, “It’s true that the price plunge has undermined confidence, but beneath the surface, participation by traditional financial institutions and major fintech companies is actually expanding.” Indeed, global fintech firms such as Robinhood and Stripe have already formalized plans to enter the blockchain-based payments market centered on stablecoins.

He added, “Some players that were considering launching new digital-asset treasury companies are highly likely to delay or revisit their plans,” while also arguing that “the broader shift of global payments and financial infrastructure onto blockchain rails will be irreversible.”