Has Bitcoin Already Hit Its Floor? Grayscale Bets Everything on the Fed

After the rain, comes the sunshine. Grayscale is not new to betting on the end of Bitcoin's sacred four-year cycle. The asset management company is doubling down this week with a precise argument: if the U.S. Federal Reserve, the Fed, does not raise its rates during its meeting on July 29, the current market low may already be behind us. Key points of this article: * Grayscale has questioned the traditional four-year cycle of Bitcoin, based on the U.S. Federal Reserve's decisions regarding interest rates. * Growing uncertainty surrounds the Fed's decisions, with significant implications for Bitcoin's future trajectory and its perceived role in the financial landscape. Zach Pandl, head of research at Grayscale, advocates a reading that diverges from the usual orthodoxy of the sector. Gone is the idea that the price of BTC mechanically follows a cycle tied to the halving (the halving of the mining reward every four years). Indeed. According to him, it is now the interest rates and economic growth that drive the asset's trajectory. If the Fed refrains from raising its rates and the economy holds up, the floor may already be set. Nothing more. As reported by Decrypt, this is the heart of the so-called macro asset thesis. On the other hand, the more traditional reading of the four-year cycle has not completely disappeared at Grayscale itself. This school of thought relies on Bitcoin's historical lows, which show an average drop of 80% from their peaks: under this hypothesis, a later low, around September or October, remains plausible. Two theses, one short-term arbiter: the Fed's monetary policy committee, meeting on July 29. The betting market has not made a decision either in the face of the Fed. The figures from the derivatives market provide a good measure of the prevailing uncertainty. According to the CME Group's FedWatch tool, the probability that the Fed will keep its rates unchanged at this meeting is around 66%, down from nearly 88% just a week ago. A shift that reflects a market that is significantly less confident than it was recently. This growing uncertainty fits quite well with the broader macro climate: oil above $100, tensions around the Strait of Hormuz, stock markets shaken by doubts about AI spending. The ongoing economic puzzle. The puzzle does not stop at July 29. For the next meeting in September, futures on rates have seen the probability of a hike jump to 82%, up from less than 53% just a week ago, according to the CME Group's FedWatch tool. This complicates Grayscale's thesis significantly: even if the Fed holds off at the end of July, a tightening at the start of the school year would undermine the argument of a floor already set. The real lesson from this episode goes beyond Bitcoin's fate alone. It illustrates how much the asset, often presented as decoupled from traditional finance, increasingly depends on the same levers as any risky asset class: interest rates, growth, risk appetite. The debate over the death of the four-year cycle, ultimately, is just a polite way of saying that Bitcoin resembles more and more a growth stock rather than the decoupled digital gold it was presented as just a few years ago.

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