Grayscale Bitcoin bottom call hinges on Fed holding rates steady
Zach Pandl says Bitcoin may have set its low, but Grayscale ties the call to Fed policy and upcoming crypto legislation.
By Sofia Marchetti · Columnist
· 3 min read
The Grayscale Bitcoin bottom argument is straightforward: the asset may already have reached its low for this cycle if the Federal Reserve does not raise interest rates again. For everyday investors, that frames Bitcoin less as a stand-alone crypto trade and more as an asset being pulled by the same forces moving stocks, bonds and gold.
Grayscale head of research Zach Pandl made the case in a Wednesday note, according to the firm. He compared two ways of reading the current market: the older four-year cycle model built around Bitcoin halvings, and a macro view that puts interest rates and growth expectations at the center.
Bitcoin was listed at $64,752 in the market data cited alongside the report, down 1.44%. The token has rebounded more than 10% from an early-July low of $57,717, while spot Bitcoin exchange-traded funds have recorded nearly $1 billion of net inflows over seven straight sessions, according to Grayscale.
Has Bitcoin already bottomed?
Grayscale’s answer is conditional. Pandl said Bitcoin may have already made its cycle low if the Fed avoids further rate increases, because higher rates tend to pressure assets whose appeal depends on future growth or protection against currency debasement.
A cycle low means the lowest price in a given market downturn before a recovery begins. Grayscale is not saying that outcome is guaranteed. The firm tied the idea to Fed policy, with the central bank set to meet on July 29.
The alternative view is the four-year cycle theory. That framework treats Bitcoin’s halving as the main clock for market peaks and troughs. A halving is a scheduled event in Bitcoin’s code that cuts the reward paid to miners in half, reducing the pace at which new Bitcoin enters circulation roughly every four years.
Under that model, Pandl wrote that Bitcoin’s low would be expected in September or October. With Bitcoin around $65,000, that would imply more downside before a bottom. Grayscale also said past cycles have tended to bottom about a year after a peak and around two and a half years after a halving, with average drawdowns of about 80%.
That historical pattern would put a potential low closer to $50,000, according to the chart analysis described by Grayscale. CryptoQuant said in February that Bitcoin’s bear-market floor was $55,000 based on realized price, a metric that values coins by the price at which they last moved. In June, 21Shares said Bitcoin’s price action still looked familiar to the four-year cycle, after previously expecting that pattern to have ended.
Why does the Fed matter for Bitcoin?
Interest rates affect the relative appeal of risk assets. When real interest rates rise, meaning bond returns after inflation improve, investors have more incentive to hold interest-bearing assets instead of assets like Bitcoin that do not generate cash flow.
Grayscale’s macro view treats Bitcoin as closer to gold or a rate-sensitive technology stock than to a purely speculative retail asset. Pandl said earlier Bitcoin bear markets lined up with slowing economic growth and rising real rates, and that the current downturn has also come with a major shift in Fed expectations.
Bitcoin peaked near $126,000 in October 2025 and remains roughly 49% below that level, according to Grayscale. The firm said the next major catalysts are the Fed’s July 29 meeting and an August 7 Senate deadline tied to the Clarity Act, a crypto-market structure bill. Those events, in Grayscale’s view, could shape whether Bitcoin’s rebound from July lows holds or the four-year-cycle bears get another test.
This story draws on original reporting from Decrypt.
