Gray Research Director: If the Federal Reserve holds steady, Bitcoin will catch up with stock market gains

Grayscale Research Director Zach Pandl pointed out that if the Federal Reserve maintains interest rates unchanged, Bitcoin is expected to catch up with stock market gains. Since the war began in February, U.S. stocks have risen 9%, BTC has slightly fallen 1%, and gold has dropped 20%.
(Background recap: Nomura chief warns: No rate hike by the Federal Reserve in June marks a key turning point for AI)
(Additional background: Fed new chair cautious hawk! Refuses to promise rate cuts, initiates "Federal Reserve reform," dot plot hints at rate hikes in 2026)

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• Rate expectations boost holding costs
• The dual functions of Bitcoin
• Grayscale’s judgment and market divergence

Grayscale Research Director Zach Pandl stated on the 23rd that if the Federal Reserve (Fed) keeps rates unchanged for the rest of 2026, Bitcoin prices are expected to catch up with stock market gains, making up for recent underperformance.

In the latest analysis, Grayscale pointed out that since the Iran conflict began at the end of February, U.S. stocks have risen 9%, Bitcoin has slightly fallen 1%, and gold has dropped 20%.

Rate expectations boost holding costs

Pandl noted that since the conflict started, the one-year Fed rate expectations have increased by about 60 basis points, with roughly half of Fed officials considering a rate hike this year to be reasonable. The European Central Bank has already raised interest rates. As non-interest-bearing currency assets, gold and Bitcoin are effectively competing with fiat currency. Rising real interest rates on fiat currency increase the opportunity cost of holding cryptocurrencies and precious metals, thereby suppressing demand.

Currently, market pricing suggests about 1.5 rate hikes this year. Bank of America expects a 25 basis point hike in September, October, and December, while Nomura believes that if the Fed’s June meeting remains unchanged, it will be a key turning point for the credit cycle and the AI boom.

The dual functions of Bitcoin

Grayscale emphasizes that Bitcoin plays a dual role in investment portfolios:

• Scarce digital commodity: Can serve as a long-term store of value, similar to gold
• Public blockchain asset: Provides exposure to the long-term growth of the crypto industry, similar to growth stocks

Pandl stated that if the likelihood of rate hikes decreases and the scenario aligns with Grayscale’s basic outlook, Bitcoin’s performance is expected to catch up with the stock market.

Grayscale’s judgment and market divergence

Grayscale disagrees with market expectations of rate hikes. The basic scenario is that the Fed will remain on hold in 2026. If this judgment is correct, Bitcoin is expected to rally in the second half of the year.

Currently, Bitcoin’s price has gradually surpassed the $65,000 mark, and Strategy also purchased 520 BTC last week for $34.9 million, indicating that institutional buying remains actively positioned.