David Bailey — entrepreneur, founder of Bitcoin Magazine, and former Bitcoin adviser to U.S. President Donald Trump — believes another Bitcoin bear market is still years away, pointing to unprecedented levels of institutional adoption.
Speaking on X Saturday, Bailey said this is the “first time we’ve ever seen real institutional buy-in,” noting that sovereigns, banks, insurers, corporations, and pensions are beginning to accumulate Bitcoin. “The process has already begun in earnest, yet we haven’t even captured 0.01% of the total addressable market. We’re going so much higher. Dream big,” he wrote.
Bailey contrasted today’s momentum with earlier institutional involvement, which he described as limited to “outliers with marginal bets.”
However, some analysts caution that Bitcoin’s historic four-year cycle and broader market risks could still trigger major corrections, despite Bailey’s optimism.
Bailey, who also founded BTC Inc., played a key role in shaping Trump’s Bitcoin stance during his presidential campaign.
In the past two years, institutions have ramped up their crypto exposure through exchange-traded funds (ETFs) and corporate treasuries, pushing total holdings past $100 billion — the majority of it in Bitcoin (BTC).
Reasons for a crypto bear market
A June report from venture capital firm Breed warned that most crypto treasury companies may not survive in the long run — a scenario that could set off the next bear market.
ZX Squared Capital co-founder and CIO CK Zheng told Cointelegraph that crypto remains closely tied to equities, meaning a stock market downturn would almost certainly drag digital assets lower.
Earlier this year, equities came close to tipping into a bear market but quickly recovered. Zheng noted that recent developments have reduced the likelihood of a repeat.
“The real question is whether we’ll see a bear market in the second half of the year,” he said. “In my view, that’s unlikely, especially after the Fed’s pivot to lower interest rates and Jerome Powell’s comments last Friday.”
“Right now it’s one of the biggest signals in terms of the Fed willing to cut the interest rate, most likely, in September, and that’s probably the beginning of a low-interest-rate cycle, given the economic data and the labor market softening.”
Pav Hundal, lead market analyst at Australian crypto exchange Swyftx, noted that the market has been in a risk-on phase, fueling flows into high-momentum assets such as Bitcoin and Ether. Still, he expects capital will eventually rotate back into fixed-income instruments.
“The path of least resistance is higher for Bitcoin, but that doesn’t mean a bear market is years away. Macro shocks tend to arrive when least expected. My view is that we’ll continue to see what we’ve seen so far — reduced price volatility with each cycle,” Hundal said.
“Interest rate rises are politically tricky, but the market expects a rise again over the next year, and that could be a catalyst for a correction.”
An end to crypto bear markets could be possible
The last bear market was in 2022, and before that, in 2018. In both instances, a booming bull market preceded the crash.
Ryan McMillin, co-founder and CIO of Australian crypto investment firm Merkle Tree Capital, told Cointelegraph that the base case suggests a market peak around Q2 2026. He added that a reversal in global liquidity around that time could trigger a relatively mild bear market by mid-2026.
“A leverage unwind from debt-driven Bitcoin purchases or a regulatory shock could be the catalyst for the downturn,” McMillin said.
“The Direct access trading (DAT) and institutional markets add huge pools of demand, but they also come with 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.”
McMillin also noted there’s a chance the market may avoid a bear phase altogether, drawing a comparison to gold after the early 2000s ETF launch, when the asset entered an eight-year “up only” run as it became financialized.
He explained that a sharp, parabolic bull market is typically a prerequisite for a deep and prolonged bear market. So far, however, each rally in this cycle has been followed by periods of consolidation where leverage resets, allowing the bull trend to continue.
“If this structure holds, we won’t see a true bear market — just regular corrections, which in my view are strong buying opportunities,” McMillin said.
