• Grayscale Research predicts Bitcoin could hit new all-time highs in 2026, challenging the traditional four-year cycle narrative.
• Recent Bitcoin drawdowns are consistent with historical averages, suggesting normal market volatility rather than a major trend reversal.
• Privacy-focused crypto assets outperformed in November, highlighting growing investor interest in private transactions.

Grayscale Research is challenging a long-standing belief in the crypto market: that Bitcoin strictly follows a four-year price cycle. Traditionally, Bitcoin sees parabolic gains fueled by retail traders, followed by steep cyclical drawdowns.

But according to Grayscale, this bull market is different. Institutional investors, digital asset treasuries, and exchange-traded products (ETPs) are now driving demand, not retail frenzy.

The research notes that Bitcoin has avoided the typical parabolic spike seen in past cycles. 

Coupled with potential Federal Reserve rate cuts and bipartisan U.S. crypto legislation, the environment may support a break from historical patterns.

While market volatility remains, the firm believes Bitcoin could reach new highs in 2026, even as the four-year cycle thesis predicts a downturn.

Also Read: Bitcoin Hits Triple Bottom: BTC Eyes $210K+ Cycle Target

Bitcoin Market Pullbacks Remain Within Historical Range

Bitcoin’s more recent slide from early October to November resulted in a 32% loss from peak to trough. This is in line with history, since 2010, Bitcoin has had more than 50 drawdowns of at least 10%, and the average peak-to-trough drop is 30%.

Grayscale separates drawdowns into two categories: long-term cyclical declines, which last roughly 2–3 years, and shorter bull market pullbacks that average 25% over a couple of months.

The recent drop falls into the latter camp, so it appears to be typical bull market action. Despite the dip, some indicators point to potential stabilization.

High put option skew for 3– and 6-month tenors indicates investors are hedging against further downside, while large digital asset treasuries trade at discounts to the underlying crypto on their balance sheets.

On-chain data, including spikes in Coin Days Destroyed, shows that some long-term holders are moving Bitcoin, which can mark the final stages of selling before a recovery.

Privacy Coins Lead in November Gains

And Bitcoin was in the middle of the performance range across crypto sectors, behind privacy coins. Monero was up 30%, Zcash 8% and Decred 40%.

On the Ethereum front, Vitalik Buterin announced to developers a privacy framework, and Zcash scaling solution developer Aztec launched Ignition Chain, another development of privacy-focused Layer 2 builds.

Other sectors underperformed too, with tokens related to AI crashing by 25%; despite Near’s cross-chain Intents product and Coinbase’s x402 AI-driven payment protocol now settling over 2 million transactions daily.

The U.S. crypto ETP space, in the meantime, jumped to 124 with $145 billion in assets under management as institutional adoption grows.

Grayscale finds that Bitcoin’s long-term case is intact due to changes in market structure, the possibility of rate cuts, and regulatory uncertainty.

Near the term, swings are likely to be among investors, but those patients may continue to see meaningful gains through next year and into 2026.

Also Read: Nasdaq Proposes Raising BlackRock Bitcoin ETF Options Limit to 1 Million