The BTC Debate: Healthy Correction or Bubble Risk?

Source: CritpoTendencia
Original Title: The BTC Debate: Healthy Correction or Bubble Risk?
Original Link:
The world of Bitcoin is experiencing a fundamental shift driven by institutional interest. The new stance of financial leaders like Larry Fink, who equates Bitcoin with gold, legitimizes the asset and prompts investors to reevaluate its role as a key tool for long-term financial security and diversification.

For its part, Grayscale is suggesting that the market has become more mature and less dependent on retail activity. Price drops are seen by analysts like Fidelity as healthy corrections that purge speculation, strengthening Bitcoin’s foundation for its long-term utility. It’s essential to stay updated because market dynamics are evolving rapidly.

BlackRock’s CEO Admits He Was Wrong About Bitcoin

In an unexpected twist, Larry Fink, CEO of BlackRock, has transformed his perception of Bitcoin: he now considers it a formidable asset akin to gold. This recognition goes to the heart of investment strategy, forcing a whole new wave of investors to reevaluate the role of cryptocurrencies in the security of financial futures.

He also revealed that anonymous sovereign funds are buying Bitcoin amid recent price drops. “There are a number of sovereign funds that are waiting,” adding that they are buying “incrementally” as the price of Bitcoin has fallen from its $126,000 peak.

“I know they bought more in the 80s. And they’re establishing a longer position. And you hold it for years. This is not a trade. You hold it with a purpose, but the market is skewed, it’s very leveraged and that’s why there will be more volatility,” Fink said.

Grayscale Says Bitcoin Will Take Off in 2026

The financial firm Grayscale Research suggested that Bitcoin could reach an all-time high in 2026, even as fears of a prolonged correction persist. In their view, the rules that guided the cryptocurrency’s movements for a decade no longer describe how the current market works.

“We believe that the four-year cycle thesis will prove to be incorrect and that Bitcoin’s price could reach new highs next year,” Grayscale noted in its report.

Indeed, the firm indicates that 25% or greater corrections are common in bull markets and do not necessarily mark the start of a prolonged bearish trend.

Grayscale highlights that, unlike previous cycles, the current rally did not have a prior parabolic rise and institutional money is concentrated in listed products and digital treasuries, reducing reliance on retail activity in spot exchanges.

Strategy Bought Bitcoin This Week and Secured a Robust Reserve for Dividend Payments

Strategy is creating a $1.44 billion reserve to back dividend payments on its preferred shares and the interest on its outstanding debt.

“Strategy’s current intention is to maintain a USD Reserve in an amount sufficient to fund at least twelve months of its dividends, and Strategy intends to strengthen the USD Reserve over time, with the goal of eventually covering 24 months or more of its dividends,” the company stated.

Along with the launch of the reserve, the firm revealed an additional purchase of 130 Bitcoin for $11.7 million, bringing its total reserves to 650,000 BTC.

Is It Possible Bitcoin’s Downturn Could Last Until Year-End?

Despite the recent recovery in the crypto market, analysts warn that Bitcoin’s period of weakness may not be over. This caution is based on two main concerns: external economic risks and entrenched investor psychology.

On one hand, factors such as global economic uncertainty and potentially overblown valuations in the Artificial Intelligence sector generate fears of a bubble that, if burst, would impact risk assets like BTC.

On the other hand, Bitcoin’s price trajectory is heavily influenced by the four-year cycle theory tied to halving. Many investors, including long-term holders, believe the price moves in predetermined phases: a strong rally a year after the rewards-halving event, followed by a period of decline before the next halving.

The current moment suggests the bearish cycle is manifesting, leading some to liquidate holdings.

Bitcoin’s Crash Is “Probably a Good Thing,” According to Fidelity

Fidelity’s Global Macro Director, Jurrien Timmer, has characterized Bitcoin’s recent price drop as a healthy market correction. He remarked that SPACs, meme stocks, unprofitable tech companies, IPOs, and Bitcoin do everyone a favor by experiencing sharp declines.

According to Timmer, this drop serves to eliminate excess speculation and restore market discipline, rather than indicate a crisis. He suggests this structural reset aligns Bitcoin more closely with its adoption and utility in the real world. In his view, this favors the long-term outlook for companies and institutional investors.

As Warren Buffett said: “The stock market is designed to transfer money from the impatient to the patient.”