Grayscale Predicts New Bitcoin ATH In 2026, Says BTC Is Breaking Out Of 4-Year Cycle
Grayscale Research has predicted that Bitcoin could soar to a new all-time high (ATH) in 2026, and believes that BTC is breaking out of its historical 4-year cycle.
After three years’ of appreciation, that cycle would suggest that Bitcoin is headed for a decline in the next year.
“We believe the four-year cycle thesis will prove to be incorrect, and that Bitcoin’s price will potentially make new highs next year,” Grayscale analysts said in a Dec. 1 report.
The report comes after Bitcoin’s price plummeted 20% in the past month and over 31% since reaching its ATH of $126,198.07 on Oct. 6.
BTC price (Source: CoinMarketCap)
Crypto Market May Have Bottomed
In support of its argument that Bitcoin’s latest retracement is different from the pullbacks seen in historical 4-year cycles, Grayscale said “there are already signs that Bitcoin and other crypto assets may have bottomed.”
Firstly, the firm said that BTC’s put option skew is very high, especially for the 3- and 6-month tenors. Grayscale said that this suggests investors have “already extensively hedged downside exposure.”
Meanwhile, the largest Bitcoin treasury firms are trading at discounts to the value of the crypto on their balance sheets. This may indicate “light speculative positioning,” which the firm said is “often a precursor to recovery.”
But it added that a “variety of fund flow indicators point to still-tepid demand.” For example, futures open interest declined further in November, ETF flows were negative until late in the month, and there may have been more Bitcoin “OG” selling, the firm said.
Bitcoin’s Recent Drawdown Is Close To The Historical Average
Grayscale said BTC has “delivered favorable returns, including annual gains of 35%-75% over the last 3-5 years,” but added that these gains have come with “many significant drawdowns.” Bitcoin’s potential returns “can be thought of as compensation for its risk,” it said.
“Bitcoin investors have been rewarded for HODL-ing over the long term, but they have needed to stomach sometimes challenging drawdowns along the way,” Grayscale said.
Regarding the drawdown since October, Grayscale said that “from peak to trough,” the BTC price has declined 32%, which it said is “close to the historical average.”
It stated that there are two types of drawdowns: “cyclical drawdowns,” which involve prolonged price declines lasting 2-3 years, and “bull market drawdowns,” characterised by average price declines of 25% that last two to three months.
The recent bull market did not see a parabolic increase in BTC’s price, suggesting this retracement is not the start of a prolonged downtrend, such as those seen in the historical 4-year cycles.
The firm also said the investment landscape for crypto has changed recently. While prior cycles saw crypto prices go parabolic due to retail activity on exchange platforms, new capital is now largely coming through ETPs (exchange-traded products) and digital asset treasuries (DATs).
Industry Leaders Split On Bitcoin’s Near-Term Performance
While Grayscale believes that BTC will only set a new ATH in 2026, BitMine chairman and Fundstrat CIO Tom Lee has predicted that the crypto will reach a new peak by January.
Strategy, the largest corporate BTC holder globally, has also revised its year-end target for the Bitcoin price. It previously predicted that BTC would reach $150K before the end of 2025, but has revised that forecast to between $85K and $110K.
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