Grayscale has stated confidence that Bitcoin is nearing the end of its bear market, citing record adoption as wallets with non-zero balances approach 60 million. The firm’s Head of Research, Zach Pandl, reiterated that adoption will accelerate in the medium and long term regardless of price action. Pandl identified three catalysts for Bitcoin’s next wave, including demand for scarce assets as a hedge against U.S. fiscal debt, which is nearing $40 trillion. However, current short-term demand is driven only by the Futures market, while Spot demand remains negative, signaling risks for a sustained recovery.
Grayscale has stated confidence that Bitcoin is nearing the end of its bear market amid record adoption. According to the digital asset manager, wallets with non-zero Bitcoin balances have edged closer to the 60 million mark.
The firm’s Head of Research, Zach Pandl, reiterated that adoption will accelerate in the medium and long term regardless of the current price action. “The Bitcoin bear market has not changed our expectation for rising Bitcoin adoption over time,” Pandl stated.
Pandl added that three factors will drive BTC’s next wave of adoption. First, demand will be accelerated by the need for scarce assets or store of value assets, which could see BTC become ‘digital gold’ again as investors hedge against currency devaluation.
The U.S. fiscal debt debate is back in the headlines as it nears $40 trillion. U.S. debt has been doubling every decade regardless of which party is in office, directly impacting purchasing power through a devaluation of the dollar.
To mitigate this, investors could opt for gold and alternative stores of value such as Bitcoin. The current BTC-gold positive correlation supports Grayscale’s store of value thesis.
Pandl also believes growing blockchain adoption, as seen by stablecoins, and rising demand for crypto ETFs will boost BTC adoption. Record low BTC volatility also suggests the asset may be gearing for a massive recovery.
Despite the positive outlook, BTC faces short-term headwinds. Bitcoin is still consolidating below $70,000, and demand is purely speculative and driven by the Futures market.
Historical data shows that both Spot and Futures market demand must be positive for sustainable rallies. Currently, Futures demand is positive while spot is negative, signaling risks to any upside move.
Overall, BTC adoption has remained resilient despite it dropping from over $126,000 to below $60,000. For Grayscale, this is a positive signal in the long run, but Spot demand remains negative and could stall BTC in the short term.
