Grayscale argues the traditional four-year Bitcoin halving cycle may not apply, suggesting BTC could reach new all-time highs in 2026 as market dynamics shift and catalysts align.

The outlook remains uncertain, but the cycle thesis could be incorrect, with potential for higher levels if momentum and catalysts align.

Overall, Grayscale challenges the old cycle narrative and points to changing market dynamics that could drive 2026 highs.

Market sentiment is cautiously optimistic, with hopes for a delayed recovery pending regulatory clarity, ETF positioning, and ongoing institutional accumulation at lower prices.

A shift from retail mania to institutionally driven demand—largely via ETFs and corporate treasuries—could reduce volatility and the risk of a blow-off top.

Institutional demand through ETFs and corporate holdings may provide steadier liquidity, contrasting with earlier cycles driven by retail speculation.

Growing institutional adoption is cited as a major driver, boosting demand and market credibility for Bitcoin.

The market is expanding with more crypto ETPs following new SEC listing standards, though 2025 performance remains uneven.

Near-term recovery depends on flow indicators like futures open interest and ETF inflows, with US spot BTC ETFs showing outflows in November but four consecutive days of inflows recently.

November saw record negative outflows for US spot BTC ETFs, before a return of buying interest in four straight inflows.

Overall, ETF dynamics point to renewed institutional demand gradually returning despite early-year pressures.

Grayscale highlights its evolving reserve strategy, now holding 650,000 BTC (about 3.1% of supply) funded by stock sales to support a USD reserve amid volatility and obligations.

MSCI's decision could trigger institutional selling of billions from firms with digital assets, potentially affecting a meaningful share of Bitcoin holdings.