Grayscale: Is the BTC four-year cycle or macro assets in play? Has the bottom been reached?

Author: Zach Pandl, Head of Research at Grayscale; Compiled by Shaw, Jinse Finance

When will the Bitcoin bear market end? Market participants** largely hold two mainstream views.**

Investors who believe in the “four-year cycle” theory see the Bitcoin halving event as the core driver of price action, and believe this bear market’s evolution path will mirror historical patterns. Looking back, Bitcoin’s price typically bottoms about one year after the cycle peak, roughly 2.5 years after the halving event; the historical average maximum drawdown is about 80%.** Under the four-year cycle theory, Bitcoin still has room to the downside, and the bottom may come in September or October.**

Another view holds that Bitcoin, as an asset class, has already matured, and going forward its price action will, like most mainstream assets, be dominated by changes in the macro environment. For example, in history, Bitcoin bear markets have often coincided with slowing economic growth and/or rising real interest rates (Chart 1). This bear market has also shown similar features: a major shift in market expectations regarding Federal Reserve policy and an increase in real interest rates. Accordingly, if macro factors are the dominant force, then when these macro conditions reach a turning point, Bitcoin’s price could potentially bottom out.

We agree with the latter view. If the Federal Reserve stops raising rates while economic growth remains resilient, Bitcoin’s price may have already found a bottom.

Key takeaway: Based on the “four-year cycle” logic, Bitcoin’s price could still set new lows; while from a macro perspective, the bottom may already be in place.

Chart 1: Bitcoin price cycles and macro environment changes show a corresponding relationship

Based on the median of the magnitude and duration of past drawdowns. Data sources: Coin Metrics, Grayscale Investments. Data as of July 21, 2026.