Summary
- Grayscale Head of Research Zach Pandl said Bitcoin (BTC) may have already passed its bottom if the Federal Reserve (Fed) does not deliver additional rate hikes and economic growth remains intact.
- The report said Bitcoin's bear market can be viewed through two lenses: the four-year cycle theory and the view of Bitcoin as a macro asset shaped by broader economic conditions.
- Under the four-year cycle view, further downside remains possible based on Bitcoin's historical average drawdown of about 80%, with a potential bottom forming in September or October. By contrast, Grayscale said Bitcoin is already a mature asset from a macroeconomic perspective.
Forecast Trend Report by Period
Bitcoin may have already hit bottom if the Federal Reserve does not raise interest rates further and economic growth remains intact, according to Grayscale Head of Research Zach Pandl.
In a July 22 report titled "Bitcoin: A Four-Year Cycle, or a Macro Asset?" Pandl wrote that views on Bitcoin's bear market broadly fall into two camps: the "four-year cycle" theory and the view that Bitcoin trades as a macro asset shaped by broader economic conditions.
Under the four-year cycle framework, further declines remain possible because Bitcoin's average drawdown has historically been about 80%. On that basis, the bottom could form in September or October.
Grayscale, however, said Bitcoin has matured into an asset class influenced by the macroeconomic environment, like other major assets. If the Fed refrains from additional rate hikes and economic growth holds up, Bitcoin may have already moved past its bottom.
JH Kim
reporter1@bloomingbit.ioHi, I'm a Bloomingbit reporter, bringing you the latest cryptocurrency news.