Another institutional big shot is speaking out! Grayscale's latest 2026 outlook has thrown out a bombshell: "The four-year cycle theory is dead! Bitcoin must reach a new high in the first half of 2026" [3]. As soon as this news came out, the community exploded, with some saying they want to sell their houses to enter the market, and others saying Grayscale is harvesting retail investors. I want to clarify my stance: Grayscale's logic makes sense, but don't let the phrase "new high" cloud your judgment; these two traps can wipe you out instantly!
Let's break down Grayscale's core logic: First, the global demand for alternative value storage tools is increasing, the dollar's reserve status is weakening, and Bitcoin, as a non-sovereign asset, will be seen by more people as a "ballast"; second, regulation is about to become clearer, and the U.S. is likely to pass legislation on crypto market structure, with institutional funds continuously entering the market [3]. These two points are indeed long-term positives for the crypto space and are also the core logic of the "institutional era" that I have been emphasizing.
But the key point is coming! Grayscale says 'may reach a new high', not 'will definitely reach a new high', and it's 'in the first half of the year'. There are two traps hidden here that are the easiest to fall into:
The first trap: blindly believing that 'institutional entry will definitely lead to a rise'. Many people think that when institutional funds come in, they can buy with their eyes closed and wait to profit passively. But I must tell you, institutional entry is a slow process; they do not throw all their money in at once. Grayscale itself admits that currently, less than 0.5% of the assets managed by U.S. wealth management advisors are in crypto assets [3]. Moreover, institutions are much more sophisticated than you; they will gradually accumulate during market corrections, not buy at high points. If you chase the price now, you may just catch an institutional sell-off and become a victim.
The second trap: ignoring 'volatility before regulation is finalized'. Grayscale says regulation will become clearer, but the legislative process will definitely not go smoothly; there will be all kinds of rumors and revisions to policy drafts, and the market will fluctuate violently. For example, the previous stablecoin legislation took almost a year from proposal to approval, during which the stablecoin market fluctuated repeatedly. Next year, the legislation regarding the structure of the crypto market will likely follow a similar pattern of 'bullish expectations rising, drafts coming out dropping, and finally rising again after implementation'. Don't operate recklessly when rumors are flying everywhere, or you won't even know how you got hurt.
Let me talk about my viewpoint: the four-year cycle theory may indeed become obsolete, but that does not mean the market will keep rising. The market in 2026 will be characterized by 'slow bull + volatility'; it's possible for Bitcoin to reach a new high, but the increase will definitely not be as dramatic as in previous years, like 10 times or 20 times. Grayscale's data shows that the maximum annual increase in this round of bull market for Bitcoin is only 240%, far lower than the previous 1000% [3]. This indicates that institutional funds are making the market more mature and also more 'grinding'.
Practical advice: don't think about getting rich overnight by Bitcoin reaching a new high; controlling your position at 50%-60% is sufficient. You can allocate a small amount to Ethereum spot ETF-related assets; Grayscale mentioned that the Ethereum ETF has already attracted $13 billion in inflows [3], and there is still room for growth. But always remember to keep 30% of your cash position to deal with volatility before regulation is finalized. Those shouting 'the four-year cycle is obsolete, if you don't buy now, you'll miss it forever' either don't understand the market or want to profit off you!
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