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Head of Research at Grayscale: If the Fed Stops Raising Interest Rates, Bitcoin's Price May Have Already Bottomed Out
Svmuu News: Zach Pandl, Head of Research at Grayscale, wrote that there are currently two main views on when the Bitcoin bear market will end: one follows the “four-year cycle,” and the other views Bitcoin as a mature asset driven by macroeconomic factors.The “four-year cycle” view holds that halving events remain the core driver of Bitcoin price cycles. Historically, Bitcoin typically bottoms out about one year after the cycle peak and approximately 2.5 years after the halving, with an average cumulative drawdown of about 80%.Based on this pattern, Bitcoin may still decline further in this cycle and bottom out in September or October. Another view holds that Bitcoin’s price will henceforth be influenced more by economic growth, real interest rates, and changes in Federal Reserve policy, just like other major assets.Past bear markets in Bitcoin have typically coincided with economic slowdowns or rising real interest rates, and the current downturn is similarly occurring against a backdrop of rising expectations for interest rate hikes and rising real interest rates. Pandl stated that he is more inclined toward the macro-driven view. If the Federal Reserve stops raising interest rates and economic growth remains stable, Bitcoin prices may have already bottomed out.
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