Grayscale has said that Bitcoin could be close to the bottom of its current cycle depending on three risks falling away in the near future. In a market note, the asset manager attributed that view to the CLARITY Act, Strategy balance sheet, and Federal Reserve policy. Its base case is based on progress in all three areas.
If the CLARITY Act passes the Senate, then Bitcoin may stabilize, according to a recent market note. The financial position of Strategy needs to be improved. The Fed would have to hold back on further rate increases.
Zach Pandl, Grayscale’s head of research, warned that losses remain possible. He said, “If downside risks materialize, we could see bitcoin fall moderately further.” His weaker case included a failed CLARITY Act vote this year.
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CLARITY Act Remains Key Driver for Bitcoin Market Sentiment
Pandl talked about increased deleveraging among digital asset treasuries. He pointed out that higher interest rates from the Federal Reserve could harm the economy in case inflation stays high. These factors influenced the conservative approach of Grayscale following the market reset.
Bitcoin fell below $60,000 during a sharp crypto sell-off. The price declines were influenced by ETF outflows and liquidations. Traders continued defending the $60,000 zone.
According to Grayscale, previous Bitcoin bear markets have seen drawdowns of about 80%. However, the company does not expect a similar situation to emerge in the present case. Institutional appetite appears much firmer now.
The CLARITY Act is still a big policy driver in the scenario. It proposes the creation of the framework of a federal market structure for digital assets. The measure would offer clear guidelines to exchanges, developers, and token issuers.
Grayscale Says CLARITY Act Could Reduce Investor Uncertainty
In a Senate update, the CLARITY Act is moved to the calendar following committee passage. The bill requires discussion on the floor, amendments, and 60 votes. Its path has narrowed as the Senate schedule fills.
Grayscale said that this approval reduces uncertainty among investors. It noted that clarity of regulations can facilitate the next stage of institutional participation. Otherwise, the market will operate without the regulation framework that investors expected for this year.
The Fed is the second big risk factor in Grayscale’s negative scenario. According to recent reports, Citadel Securities expressed its concern about the potential rate increase in September 2026. The condition is that inflation is strong enough at the moment.
Why Strategy Remains a Key Risk for Bitcoin
Strategy remains an important risk factor in the market. According to a report, it lost $12 billion after Bitcoin dropped below the $60,000 level. Also, MSTR stock is trading below the value of its Bitcoin reserves.
Another analysis noted that Strategy’s Bitcoin flywheel has started working in the opposite direction. The stock premium has declined while financing has become more difficult. The additional pressure created concern regarding the digital assets treasury balance sheet.
Grayscale did not call for the repeat of previous bear markets. However, the negative scenario depends on policy, rates, and balance sheet stress. In case the CLARITY Act passes, Strategy steadies, and the Fed stays on hold, Bitcoin may be close to its low.
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