Next Bitcoin Bear Market Could Be Years Away, Says Trump Adviser Amid Mixed Industry Views
The prospect of another Bitcoin bear market appears distant, according to David Bailey, entrepreneur and Bitcoin adviser to former U.S. President Donald Trump. Speaking recently, Bailey expressed optimism that the cryptocurrency market is on the cusp of sustained institutional adoption, which he believes will drive prices significantly higher over the coming years. However, several crypto analysts caution that downside risks remain, and a bear market could still be on the horizon.
Institutional Adoption Seen as Key Growth Driver
Bailey highlighted a major shift in the crypto ecosystem, noting that this is “the first time we’ve ever seen real institutional buy-in.” In a recent post on the social media platform X, he stated: “Every Sovereign, Bank, Insurer, Corporate, Pension, and more will own Bitcoin. The process has already begun in earnest, yet we haven’t even captured 0.01% of the Total addressable market (TAM). We’re going so much higher. Dream big.”
He contrasted the current institutional participation with earlier periods when crypto investments were largely marginal outliers. Over the past two years, a wave of institutional investors such as sovereign funds, banks, and pension plans have gained exposure to cryptocurrencies through vehicles like exchange-traded funds (ETFs) and direct corporate crypto treasuries. Total institutional holdings have now surpassed $100 billion, the majority of which is held in Bitcoin (BTC).
Skepticism Over Market Resilience and Timing
Despite Bailey’s enthusiasm, experts warn that historic patterns and macroeconomic factors could still precipitate a downturn. Crypto markets have often followed a roughly four-year cycle of boom and bust, which some analysts believe remains intact.
A June report from venture capital firm Breed suggested that many companies holding crypto treasuries may not survive long term, potentially triggering the next bear market. CK Zheng, co-founder and chief investment officer at ZX Squared Capital, noted that crypto remains highly correlated with the broader stock market. “If [the stock market] slows into a bear market, crypto will follow,” he told Cointelegraph.
While the stock market flirted with bear territory earlier this year, Zheng believes a bear market is unlikely in the near term due to recent policy pivots by the Federal Reserve, including signals pointing toward potential interest rate cuts beginning in September. According to Zheng, these developments could usher in a new low-interest-rate cycle amid softening economic data and labor markets, buoying risk assets like cryptocurrencies.
Market Analyst’s Perspective on Volatility and Corrections
Pav Hundal, lead market analyst at Australian crypto brokerage Swyftx, characterized the market as currently “risk-on,” which has supported a rotation into high-momentum cryptocurrencies such as Bitcoin and Ethereum (ETH). Nonetheless, he anticipates a future “re-rotation” back into safer fixed-income instruments.
“The path of least resistance is higher for Bitcoin, but that doesn’t mean a bear market is years away,” said Hundal. He warned about the unpredictable nature of “macro shocks,” noting that decreased price volatility observed in recent cycles could precede either steadier growth or sudden corrections. He also flagged potential interest rate increases over the next year as a possible catalyst for downward price moves.
Outlook: Potential Mild Bear Market or Continued Growth
Ryan McMillin, co-founder and chief investment officer of Australian crypto investment manager Merkle Tree Capital, projects that the current market cycle might peak around the second quarter of 2026. He suggests a mild bear market could follow if global liquidity reverses in that timeframe, driven by factors such as deleveraging of debt-fueled Bitcoin positions or regulatory shocks.
However, McMillin also notes that developments like the introduction of direct access trading (DAT) and increased institutional involvement bring both demand and volatility risks. “Some of the DATs will be late to the party, overleveraged and not prepared for the volatility that makes this asset class so interesting, potentially being the catalyst of the next bear market,” he explained.
Interestingly, McMillin raised the possibility that a significant bear market might not occur at all, drawing parallels to gold’s post-early 2000s era when the launch of ETFs financialized the asset and prices rose steadily for years. He emphasized that without a preceding parabolic bull market, a deep and sustained bear market is unlikely. Instead, the market may continue to experience “regular corrections, which are great buying opportunities.”
Context of Previous Cycles
Bitcoin’s last bear markets occurred in 2018 and 2022, each following a period of rapid price appreciation. The interplay of market cycles, investor sentiment, liquidity conditions, and macroeconomic trends continues to shape cryptocurrency price dynamics.
As the industry debates the timing and likelihood of the next bear market, stakeholders keep a close watch on institutional adoption, monetary policy adjustments, and regulatory developments that could influence crypto’s trajectory in the coming years.
This article is based on reports published by Cointelegraph and statements made by prominent figures within the cryptocurrency community.