4-Year Cycle Dead? Bitcoin Could Hit New Highs in 2026, Grayscale Says

• Grayscale is optimistic that Bitcoin (BTC) could hit new all-time highs in 2026, despite the current downturn that has erased most of the year’s gains.
• The firm challenges the traditional “four-year cycle” thesis linked to halving events, arguing that deep pullbacks (like the current roughly 27% drop from the ATH) are common in bull markets.
• BitMine’s Tom Lee supports this view, expecting BTC to set a new all-time high by January 2026, as improving fundamentals make the risk/reward “attractive.”

Bitcoin and the rest of the crypto market have been under pressure for the last couple of months, essentially erasing all of this year’s gains with a 4.3% decrease yearly for BTC, and the market’s capitalisation barely holding on to the US$3.1 trillion mark (AU$4.72 trillion).

But Grayscale remains optimistic, as the firm’s research unit says BTC could reach new all-time highs in 2026, arguing the market is not entering a prolonged downturn despite a sharp pullback since October.

In a report published Monday, the firm challenged the “four-year cycle” thesis, which links major Bitcoin peaks and crashes to its halving schedule. Grayscale analysts said that while the outlook remains uncertain, they expect BTC to “potentially make new highs next year” rather than repeat past boom-bust patterns.

Read more: China’s Central Bank Reasserts Crypto Ban, Warns Stablecoins Pose Major Financial Risks

Volatility Ahead

Bitcoin’s price went from US$90K (AU$136.8K) to below US$85K (AU$129.2K) at least three times in the last 40 days or so, a clear sign of volatility that even pushed investor sentiment to levels even lower than the post-FTX era. BTC is now 27% down from its ATH of US$126K (AU$191K) on Oct. 6 of this year.

BTC/USD, Source: TradingView.

But Grayscale said drawdowns of 25% or more are common during bull markets and do not automatically signal a structural top. 

This is a view that Tom Lee, CEO of BitMine, shares. Writing on X, he said crypto prices have dropped “relentlessly” even as fundamentals such as wallet growth, on-chain activity, fees and tokenisation improve, making the risk/reward “attractive” for Bitcoin and Ethereum. 

Lee also told CNBC he expects Bitcoin to set a new all-time high by January 2026, now backing down from his stance that BTC could reach over US$250K (AU$382K) by year-end.

Related: Tether Fires Back at S&P Downgrade, Citing Billions in Equity and Strong Revenue

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