Grayscale: Bitcoin May Reach New Highs in 2026, Four-Year Cycle Theory in Doubt

According to Grayscale's latest report, Bitcoin's 32% pullback since the beginning of October aligns with historical averages, marking the ninth significant pullback in the current bull market. Grayscale believes that Bitcoin may not enter a deep cyclical downturn and expects its price to reach new highs next year, questioning the applicability of the four-year cycle theory.

The report notes that this bull market has not seen the parabolic rises observed in previous cycles, and the market structure has changed, with funds primarily flowing in through exchange-traded products (ETPs) and digital asset trusts (DATs), rather than retail trading. Additionally, privacy-focused cryptocurrencies have performed well, with Zcash rising 8%, Monero increasing by 30%, and Decred soaring by 40%. Meanwhile, the first ETPs for XRP and Dogecoin have begun trading.

Grayscale also mentioned that the Federal Reserve may cut interest rates again at the meeting on December 10, and progress on cryptocurrency legislation by both parties in the U.S. is expected to provide more positive momentum for the market. Although market volatility remains in the short term, Grayscale holds an optimistic view on the cryptocurrency market's prospects for 2026 and emphasizes the importance of long-term holding.