As Bitcoin faces a dip from its recent all-time high, struggling to maintain the $100,000 level after a selloff triggered by the Federal Reserve, now is not the time for panic, according to Grayscale’s Director of Research.
Despite the recent market volatility, Grayscale’s Zach Pandl reassured investors, highlighting the long-term investment outlook during an appearance on Coinage. “There’s absolutely no reason to panic,” Pandl emphasized. He pointed out that the broader macroeconomic environment remains supportive, with central banks globally easing rates. Furthermore, the rise of Bitcoin exchange-traded funds (ETFs) and a shift toward pro-crypto policies in the U.S. set the stage for continued growth in the space.
The Federal Reserve’s recent rate cut, accompanied by a cautious outlook from Chairman Jay Powell, suggested fewer rate cuts may be expected in 2025. This, Pandl noted, has strengthened the dollar temporarily while putting some pressure on Bitcoin. “They’re still cutting rates, but they indicated that there may be fewer rate cuts next year,” he explained, noting that this is positive for the dollar but negative for assets like gold and Bitcoin, which compete with the dollar.
Looking to the future, Pandl believes Bitcoin’s price movements reflect its growing importance in the global financial system. “Bitcoin is no longer just an obscure asset; it’s a $2 trillion entity at the heart of global finance,” he stated. He described recent fluctuations as a natural part of Bitcoin’s deeper integration into the global economy, positioning it alongside major fiat currencies like the euro and the yen.
Pandl also provided a glimpse into the crypto market’s future, acknowledging that the market is in an intermediate phase of its cycle. “Bitcoin dominance should be on the decline at this stage,” he noted, with Bitcoin’s market share already decreasing in line with past cycles. This could mean that altcoins are likely to see strong performance moving forward. “An ‘altcoin season’ would be a favorable development for many of our investors,” he added.
Beyond market trends, Pandl pointed to significant regulatory changes expected under the upcoming U.S. administration. He described these shifts as a “huge policy change” with the potential to reshape the crypto landscape. Of particular importance, he noted, is the need for clearer regulations around staking, which could open up new avenues for institutional involvement. “Staking isn’t problematic; we just need clearer guidelines,” he explained.
Institutional adoption continues to be a key theme, with Pandl anticipating that long-term investors—such as pension funds, endowments, and sovereign wealth funds—will represent the next wave of substantial buyers. “Bitcoin fits naturally into a diversified portfolio,” he concluded.
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