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Hi. Eric here.

Bitcoin has had a raw few months.

After achieving a $126,000 record high in October, a $19 billion wave of liquidations triggered a massive sell-off that saw the cryptocurrency lose roughly half of its total value.

And since February 28 when the US and Israel attacked Iran, the price of Bitcoin has trembled around $70,000.

But despite the downturn and the tsunami of gallows humour flooding social media feeds, investment firms are surprisingly positive about the market conditions.

“We are reluctant to call it a ‘crypto winter’ given how busy we are with prospective investors,” Zach Pandl, head of research at Grayscale, told me. “The current feeling at Grayscale could not be more different than the tone on Crypto Twitter — probably because we can see the institutional capital coming.”

Pandl represents one of the investment firms I spoke to this week that say that institutional investors are revving up to inject money into crypto assets. Indeed, VanEck estimates that institutional investors will pile up to $13 trillion into Bitcoin by 2030.

That wave of investment comes as James Butterfill, head of research at CoinShares, told me that he expects that the price will creep towards $80,000 over the next month or so.

His argument is simple. Whales, which he defines as individuals or entities that own over 10,000 in Bitcoin, started to take profit in October. If previous cycles are anything to go by, sell-offs usually ebb after six months, which would be around April or May this time around.

Once that sell-off ends, the price will go up, Butterfill said.

That’s an optimistic outlook. Punters on Polymarket bet that Bitcoin’s price has a 69% chance of reaching $80,000 in 2026. Conversely, they put the chances of it dropping to $55,000 at 74%.

To be sure, there are plenty of factors threatening to drag down the price.

The conflict in the Middle East still weighs on markets, and has eroded the probability that the Federal Reserve will cut interest rates this side of July. Higher interest rates are usually bad for risk-on assets like cryptocurrencies.

Elsewhere, there’s the upcoming midterms in the US. Republicans seem to be in for an absolute beating, despite the crypto lobby heavily favouring their candidates. If Democrats retake the House, that will likely grind crypto legislation to a halt.

Unless banks, crypto companies, and politicians on Capitol Hill find a way to move forward with the Clarity Act before that, the landmark crypto markets bill is unlikely to get passed before 2028.

Polymarket bettors give the bill a 61% chance of getting passed this year, down from 82% in February.

Still, after almost a month of war, it’s good to see some glimmers of hope.

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Post of the Week

The Clarity Act has been stuck in a legislative limbo for months. The core problem? Whether the law should allow passive yield on stablecoins. The banks say no, crypto says yes and so far no one is budging.