David Bailey: The Bitcoin Bear Market is still far away! Institutional funds pouring in may rewrite the market cycle.

Bitcoin (BTC) is expected to perform strongly in 2024–2025, with institutional funds continuously flowing into the market through ETFs and reserve allocations. David Bailey, Bitcoin advisor to U.S. President Trump and founder of BTC Inc., recently stated that as institutional participation reaches an all-time high, a traditional Bitcoin bear market may not occur in the coming years. However, several analysts caution that historical cycles and macro risks could still lead to unexpected pullbacks.

Bailey's Optimistic View: Bitcoin in the Era of Institutions

Bailey believes that this is the first time in Bitcoin's history that true global institutional participation has arrived:

Participants include: governments, banks, insurance companies, enterprises, pension funds, etc.

Market penetration rate: Currently only reaching 0.01% of the total addressable market (TAM), there is still significant room for growth.

Capital scale: The total amount of crypto assets held by institutions has exceeded $100 billion, most of which is Bitcoin.

He emphasized that in the past, institutions involved in cryptocurrency mostly engaged in "small-scale trials," but now it is a strategic long-term allocation that may change the cycle structure of Bitcoin.

Counterpoint: Historical Cycles and Potential Risks

Despite the influx of institutional funds, some analysts believe that the risk of a Bear Market has not disappeared:

1. Macro and Stock Market Interaction

CK Zheng, CIO of ZX Squared Capital, pointed out that the crypto market is highly correlated with the stock market, and if the stock market enters a Bear Market, BTC will also be under pressure.

Although the Federal Reserve may cut interest rates in September, long-term macroeconomic shocks remain difficult to predict.

2. Leverage and Asset Survival Rate

Venture capital firm Breed reports that only a few of the current crypto reserve assets can survive in the long term.

High-leverage Direct Access Trading (DAT) and late-stage institutional entry may become the trigger for the next Bear Market.

3. Capital Flow and Risk Preference

Pav Hundal, the Head of Analysis at Swyftx, stated that the market is currently in a "risk-on mode," with capital flowing into BTC and ETH.

But capital may eventually flow back to the fixed income market, becoming a funding pressure for the crypto market.

Historical Cycles and Future Predictions

Past Bear Markets: 2018 and 2022 both experienced deep pullbacks after parabolic bull markets.

Current cycle: Merkle Tree Capital CIO Ryan McMillin predicts that the peak of this cycle may occur in Q2 2026.

Possible scenario:

If global liquidity reverses after its peak, a mild Bear Market may emerge around mid-2026.

If the rise is accompanied by long-term consolidation and leverage rebalancing, it may avoid a deep Bear Market, replaced instead by multiple mid-term pullbacks.

Investment Insight: Bear Market May Not Disappear, But Structure May Change

Bailey says: Institutional funds will reshape the Bitcoin cycle, and in the future, there may only be "pullback," without a traditional Bear Market.

Cyclical Distribution: Historical patterns and macro risks cannot be ignored, and precautions against downturns are still necessary after 2026.

Strategy Recommendation:

Long-term investors can accumulate positions during pullbacks.

Short-term traders need to pay attention to macroeconomic data and stock market trends.

Control leverage to prevent sudden macro shocks.

Conclusion

David Bailey's perspective injects confidence into Bitcoin bulls, but historical experience tells us that the market is never short of surprises. Whether the bear market is "delayed" or not, investors should remain cautious amidst optimism and use pullbacks as opportunities for positioning, rather than blindly chasing highs.