BTC Current Affairs

Has Bitcoin Finally Escaped Its Four-Year Cycle? Grayscale Says the Fed Holds the Answer

2026-07-25

Grayscale's head of research Zach Pandl dropped a Wednesday note arguing Bitcoin may have already hit its cycle low—provided the Fed stops hiking rates. It's a bold claim. It's also a direct challenge to two decades of Bitcoin folklore.

Here's the traditional story: Bitcoin halves its mining rewards roughly every four years, slowing inflation. This pattern has supposedly anchored four consecutive boom-and-bust cycles. Markets should expect an 80% drawdown from peak. With Bitcoin peaking near $126,000 in October 2025 and currently trading around $65,000, that playbook suggested another leg down was due—perhaps to September or October. The math was neat. The problem: it assumed Bitcoin was just a commodity driven by its own internal mechanics.

Pandl disagrees. Bitcoin is mature now. It trades like a macro asset—responsive to interest rates, real yields, Fed policy, risk appetite. Same forces that move equities move Bitcoin. And if that's true, then Bitcoin bottoms when macro conditions turn, not when the halving cycle says so.

The timing of this argument matters. Kevin Warsh, the hawkish Fed pick, spooked the market in October. Bitcoin had thrived under debasement narratives; tight money killed that trade. But there's been recovery. Spot ETFs pulled in nearly $1 billion in net inflows over seven consecutive sessions. The early-July low of $57,717 already looks distant.

What's Grayscale's bull case rest on? A single conditional. If the Fed finishes raising rates while the economy stays stable, Bitcoin doesn't need to crater further. That's the entire thesis. It's not saying Bitcoin won't fall. It's saying the bear market could be over already if macro policy turns constructive.

Two catalysts matter now. July 29: Fed meeting. August 7: deadline for the Clarity Act in the Senate. The Clarity Act divides regulatory oversight between the SEC and CFTC—it's been stuck for months. The July 4 target passed without approval. August 7 is the last working day before recess. Pass the bill, and you unlock institutional capital that's been on the sidelines waiting for clarity.

Not everyone buys it. Jiang Zhuoer, founder of a mining pool, projects the cycle low won't come until October-December 2026. He's anchoring on institutional valuation measures. Others note that spot Bitcoin ETFs—absent from previous cycles—have fundamentally changed the market structure. They've introduced steady institutional buyers that probably smooth out the savage reversals that once defined bear markets.

The real question underneath all this: Has Bitcoin grown up? Has it shed the cyclical pattern of its first thirteen years? The recent downturn coincided with tight policy expectations and rising real yields. Both hurt risk assets. Grayscale's researchers admit further declines are possible. They're just saying the macro picture matters more than the halving calendar now.

For traders trying to time entry points, the next few weeks will decide it. Either the Fed and Congress finally break Bitcoin free from its old rhythm, or the pattern reasserts itself. Either way, we'll know soon enough.

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