Grayscale Investments Fades Bitcoin 4-Year Cycle, Predicts ATH in 2026

Grayscale Research said that its current Bitcoin price predictions points to new highs in 2026.

The firm based its view on market structure and rising demand from exchange-traded products.

Notably, the outlook also reflected policy conditions in the United States, while analysts highlighted new risks associated with Japan’s policy shift.

The Grayscale Bitcoin Price Prediction

Bitcoin Price Prediction models from Grayscale show a break from the pattern that many investors have followed for years.

As detailed, the firm stated that the drawdown since early October aligns with the typical pattern observed in past bull markets.

The decline reached about 32% from peak to trough. The team noted that Bitcoin typically experiences several pullbacks each year during periods of strong market growth.

There was no parabolic rise in this cycle, and the firm said this is an important point. Past bull markets often included sharp increases before major declines.

The present cycle has taken a different shape. Capital now enters the market mostly through exchange-traded products and digital asset treasuries.

Retail speculation is playing a smaller role. Grayscale said this shift may reduce the size of deep and long declines.

Some indicators suggest that the market may be near a temporary bottom. Grayscale pointed to high put option skew, which show that investors have hedged downside risk.

Several digital asset treasuries also trade at discounts to the value of their holdings. These discounts indicate that speculative demand is relatively low.

Futures interest and exchange-traded product flows remain weak, and data suggested selling by long-term holders in late November. A more positive outlook may emerge once these trends turn upward.

Grayscale expects new highs next year as the firm said long-term holdings remain important for gains. The firm’s Bitcoin Price Prediction reflects this view.

Japan Liquidity Shift Raises Concerns

A separate trend has caught the attention of market watchers. Japan may create new pressure on global markets as its prolonged period of very low interest rates comes to an end.

Market commentator Shanaka Anslem Perera said Japanese ten-year yields reached 1.86%, the highest level since 2008.

He stated that the Bank of Japan may raise rates in December. He placed the probability near 76%.

Japan provided cheap funding for decades, encouraging investors to borrow yen at very low cost and place the money in global assets.

Perera said this carry trade reached about $20 trillion in size. He listed $4.5 trillion in Japanese foreign investments and $1.1 trillion in U.S. Treasury holdings by Japan.

A rise in Japanese rates may bring capital back home. Perera noted that one rate increase in the past erased $500 billion in global value.

Per his post, Bitcoin moved lower as the yen strengthened. Prices dropped from $97,000 to $86,000.

Data showed liquidations of $646 million in crypto positions in a short period. Perera believes Bitcoin reacted to the change in funding conditions, not to crypto-specific news.

ETF Trends Could Shape Market Conditions in 2026

Spot Bitcoin ETFs in the United States reported steady bullish activity. Data from December 1 showed net inflows of $8.48 million.

XRP ETFs reported $89.65 million in net inflows, with Ethereum and Solana products showing net outflows.

Grayscale said clearer rules helped draw more institutions into the market in 2025.

A total of 124 crypto exchange-traded products are now listed in the United States with $145 billion in assets.

Lower rates in the United States may support demand for Bitcoin through these products.

The Federal Reserve will meet this December. A rate cut could add support for assets that compete with the Dollar. Some members of the administration have signaled interest in lower policy rates.

Progress in Congress on market structure policy may also help to shape conditions in 2026.

These factors may support flows into exchange-traded products. Grayscale said this environment may help its Bitcoin Price Prediction for next year.