Amidst the sharp decline in cryptocurrency markets, Bitwise released a noteworthy assessment. A Bitwise representative claimed that despite the selling pressure in recent weeks, Bitcoin is still very close to bottoming out and that current prices represent an “opportunity zone for long-term investors.”
ETF Outflows and Market Dynamics
According to the analyst, the large outflows from Bitcoin ETFs were one of the key drivers of the risk-off movement that began in mid-October. However, there's also a shared view that a return to these funds will accelerate the recovery. Bitwise, noting the continued interest from institutional investors, believes Bitcoin will lead the recovery, just as it has typically led the way in declines.
While the launch of spot Bitcoin ETFs is seen as a major institutionalization step for the sector, analysts argue that it has a double-edged effect. Greater liquidity also enables faster declines. “New players, hedge funds, and large portfolio managers engaging in arbitrage are entering and exiting the market. This increases volatility, especially during periods of uncertainty,” he said.
Long-Term Institutionalization Trends
The longer-term picture is different. Bitwise argues that volatility is declining on a 10-year trend and that Bitcoin is becoming an increasingly institutional asset thanks to new investor profiles entering the market. The company states that asset managers and financial advisors, in particular, are regularly adding Bitcoin to their model portfolios, generating stable and long-term demand.
It's reported that there's been a significant slowdown in corporate treasury purchases, which played a significant role in the first half of this year. “This weakening demand was one of the factors that accelerated the decline in October. However, low prices always present an opportunity for long-term institutions,” the report stated.
Impact of Federal Reserve Policies
Another focus of the markets is the Fed's interest rate decisions. Despite Bitcoin being described as a “store of value independent of the fiat currency system,” its recent high correlation with macroeconomic expectations has sparked debate. A Bitwise analyst stated that Bitcoin will inevitably be affected by Fed policies in the short term due to its increasing “cyclical dominance” since the pandemic.
The market has largely priced in the possibility of a December interest rate cut. The analyst noted that Bitcoin's recent bottoming at $90,000 and its subsequent recovery alongside other risk assets support this view.
Future Price Forecasts
While Bitwise hasn't officially announced a target for 2025, it has shared a clear forecast for 2026: $200,000. This expectation is based on the prediction that institutional demand will increase exponentially. The company argues that a broad wave of institutional investors, from industry funds and university endowments to pension funds and corporate balance sheets, is “inevitable.” Harvard's Bitcoin purchase was cited as a symbolic example of this trend.