Grayscale predicts new bitcoin highs in 2026, dismisses 4-year cycle view

Grayscale Research said bitcoin could set new all-time highs in 2026, pushing back against fears that the cryptocurrency is entering a deep, multi-year downturn.

In a report published Monday, Grayscale argued that bitcoin is unlikely to follow the so-called four-year cycle — the widely held belief that BTC's price tends to peak and then undergo a severe correction once every four years, in line with its halving schedule. 

"Although the outlook is uncertain, 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.

Bitcoin has been experiencing a turbulent stretch since early October, falling 32% from its peak through most of November. The price briefly touched $84,000 on Monday before recovering to $86,909 as of 2:20 a.m. ET Tuesday, The Block's price page shows.

Grayscale noted that while long-term investors have historically been rewarded for holding through volatility, they must often "stomach sometimes challenging drawdowns" along the way. Pullbacks of 25% or more, the firm added, are common during bull markets and don't necessarily signal the start of a prolonged downtrend.

Breaking the four-year cycle

Grayscale outlined several reasons why bitcoin is set to break away from its typical four-year rhythm.

Grayscale pointed out that unlike prior bull markets, this cycle has not seen the kind of parabolic rally that typically precedes a major reversal. Unlike prior cycles, the current market structure sees institutional money concentrated in exchange-traded products and digital asset treasuries instead of retail activity on spot exchanges, the report said.

The macro environment remains relatively supportive as well, Grayscale added, with potential rate cuts and bipartisan momentum on U.S. crypto legislation offering further tailwinds.

Tom Lee, CEO of Ethereum treasury firm BitMine, echoed Grayscale's view, noting what he sees as a growing disconnect between market fundamentals and prices. 

"Crypto prices have fallen relentlessly even as fundamentals, measured by wallets, onchain, fees or tokenization, have moved forward." Lee wrote on Monday in a post on X. "So risk/reward is attractive for BTC and ETH."

Lee also told CNBC on the same day that he remains bullish on bitcoin and expects the world's largest cryptocurrency to set a fresh all-time high by January next year.