Grayscale Predicts Bitcoin Could Reach New All-Time Highs in 2026

Highlights:

• Grayscale Research forecasts that Bitcoin might record new highs in the year 2026, which might defy established cycles.
• The firm added that recent price drops are normal and not long-term declines.
• Tom Lee and Grayscale pointed out that the involvement of institutions and strategic holders may push Bitcoin further.

Bitcoin could reach unprecedented levels in 2026, according to a new report from Grayscale Research. The report challenges the long-held belief that Bitcoin is always tied to a four-year cycle after halving events. Analysts said the traditional cycle may not control future price movements. The report, released Monday, noted that BTC has had a turbulent period since early October, falling roughly 32% from its peak through most of November.

BTC price briefly reached $84,000 on Monday before bouncing back to $86,741 as of 4:42 a.m. ET Tuesday, according to CoinMarketCap. Grayscale said long-term holders have usually benefited by staying invested through volatility. The firm added that pullbacks of 25% or more are normal in bull markets and do not always mean a lasting downtrend.

Grayscale Research expects Bitcoin to set new all-time highs in 2026, pushing back against the widely held “four-year cycle” narrative. The firm said this cycle has not seen the usual parabolic surge driven by retail traders, with institutional inflows, potential rate cuts, and…

— Wu Blockchain (@WuBlockchain) December 2, 2025

Grayscale Highlights Unique Bull Market Cycle and Supportive Macro Environment

The research explained why this bull market cycle is different from previous ones. Unlike past runs, this cycle did not have fast, sharp rallies that usually come before big corrections. Institutional investors now control exchange-traded products and corporate crypto holdings, not retail buyers on spot markets.

Grayscale also said the macro environment is fairly supportive. Expectations of U.S. rate cuts and progress on bipartisan crypto laws could give digital assets extra momentum. Some signs suggest Bitcoin and other crypto may have hit a short-term bottom. High put option skew for three- and six-month periods shows investors are hedging against downside risk. Major digital asset treasuries are trading below their underlying holdings, which may mean lighter speculative activity.

Grayscale analysts said the outlook is still uncertain, but the four-year cycle theory will likely be wrong. They said Bitcoin could go higher than previous peaks and reach levels not seen before. The report also said investors should be ready for occasional pullbacks. 

Grayscale and Tom Lee Confirm Bitcoin Drops Are Normal, Bull Market Remains Intact

As per the report, since November 2022, Bitcoin has dropped nine times by at least 10%. The current drop of about 32% is close to the usual average. Overall, Bitcoin has had around 50 drops of 10% or more since 2010. The average fall from peak to bottom is about 30%.

Grayscale explained two types of drops. “Cyclical drawdowns” last 2–3 years and happen about every four years. “Bull market drawdowns” are smaller, about 25%, and last 2–3 months. The latest drop matches the bull market pattern. This shows the market is not entering a long multi-year decline. The report said some short-term signs look positive, but fund flows are mixed. Futures open interest fell in November. Exchange-traded product flows were negative until late in the month. On-chain data showed a rise in Coin Days Destroyed. This means long-term holders moved older coins.

Tom Lee, CEO of Ethereum treasury firm BitMine, agreed with the report. He said market prices are falling even though fundamentals, like wallets, on-chain activity, fees, or tokenization, are moving forward.

Crypto prices have fallen relentlessly even as fundamentals, measured by wallets, onchain, fees or tokenizatio, have moved forward

So risk/reward is attractive for $BTC and $ETH https://t.co/yk6poVwSQ6

— Thomas (Tom) Lee (not drummer) FSInsight.com (@fundstrat) December 1, 2025

Lee also spoke on CNBC and stayed bullish on Bitcoin. He expects BTC to reach a new all-time high by January next year. He said current market conditions give good risk-reward opportunities for BTC and ETH.