"The market has already priced in about 35% of the anticipated 40% decline."
He notes that compared to the nearly 80% plunge in the previous cycle, Bitcoin’s realized volatility has dropped by almost half in this cycle. Bitcoin is expected to peak in early October 2025, aligning with its historical four-year cycle pattern, which typically coincides with the US presidential election.
01 Cycle Evolution
The Bitcoin market is undergoing a structural transformation. According to VanEck’s analysis, Bitcoin’s market volatility is declining significantly. The traditional four-year cycle pattern remains valid, but its manifestation has changed.
This shift is driven by a fundamental change in market structure. Matthew Sigel, Head of Digital Assets Research at VanEck, points out that Bitcoin’s realized volatility has fallen by nearly half compared to the previous cycle.
This drop in volatility is no coincidence. It reflects Bitcoin’s transition from a highly volatile, retail-driven market to a more mature, institutionally led environment.
02 In-Depth Analysis
Bitcoin has underperformed the Nasdaq 100 Index by nearly 50% this year, creating the setup for a potential rebound in 2026.
David Schassler, Head of Multi-Asset Solutions at VanEck, sees this relative weakness as an opportunity: "This divergence is setting the stage for Bitcoin to become a top performer in 2026."
VanEck’s analysis team notes that this underperformance primarily reflects Bitcoin’s heightened sensitivity to financial conditions in an environment of reduced risk appetite and tightening liquidity. As market conditions improve, this trend could reverse.
03 Macro Backdrop
Global liquidity is expected to present a complex picture in 2026. While anticipated rate cuts offer some support, US liquidity has actually tightened slightly. The boom in AI-driven capital expenditures is colliding with a fragile financing market, widening credit spreads.
By the end of 2025, the Federal Reserve will face a unique policy dilemma: a potentially weakening job market, persistent inflation, and stronger-than-expected economic growth all at once. This complex scenario makes the direction of monetary policy highly uncertain.
Meanwhile, leverage across the crypto ecosystem has reset following multiple market shakeouts. On-chain activity, though still subdued, is beginning to show early signs of recovery.
04 Gold Correlation
Gold’s strong performance serves as an important reference for Bitcoin. VanEck expects gold to extend its rally into 2026, targeting a price of $5,000 per ounce.
Gold stood out in 2025 as one of the strongest major assets. Two key drivers underpin this strength: central banks have purchased gold at record levels for three consecutive years, and Western investment demand is finally rebounding.
VanEck analysts believe both gold and Bitcoin benefit from the macro theme of "currency debasement." As governments fund past debts and future ambitions, currency debasement is becoming a shadow financial strategy.
05 Investment Strategy
In anticipation of a potential consolidation phase in 2026, VanEck offers clear guidance for investors. Matthew Sigel recommends a "gradual accumulation and buy-low, sell-high" approach.
Specifically, he suggests building a 1% to 3% Bitcoin allocation using the dollar-cost averaging method. The core of this strategy is to increase holdings during periods of leverage unwinding and reduce exposure when the market overheats and speculation is rampant.
This disciplined approach is especially suited for consolidating markets, as it helps investors avoid emotional decisions and accumulate assets at lower prices, positioning them for the next upward cycle.
06 Regulation and Policy
The regulatory landscape for cryptocurrencies could see major breakthroughs in 2026. The much-anticipated "Clarity Act," if passed in 2026, could significantly boost market confidence.
This legislation aims to clearly define which digital assets qualify as securities and which should be considered commodities. Regulatory uncertainty has long been a key barrier to broader institutional adoption of cryptocurrencies.
VanEck analysts emphasize that regulatory progress is critical to the long-term development of digital assets like Bitcoin. A clear regulatory framework not only reduces market uncertainty but could also accelerate institutional capital inflows.
07 Risks and Opportunities
The risk profile facing Bitcoin in 2026 has shifted. Traditional cyclical risks are now being supplemented or replaced by structural risks.
Patrick Liou, Director of Institutions at Gemini, predicts that as the market matures, Bitcoin could end 2026 with negative returns. He argues that market maturity—characterized by new participants, regulated investment vehicles, and deeper liquidity—has already reduced volatility.
In this complex environment, investors need to focus more on risk management and asset allocation. VanEck’s suggested 1% to 3% Bitcoin allocation reflects a balanced view of the asset class’s risks and potential.
Outlook
As of January 4, 2026, the price of Bitcoin on the Gate platform is holding steady near $91,486. During the volatility of Q4 2025, Bitcoin showed resilience, repeatedly testing the $90,000 support level and rebounding quickly each time.
A quiet revolution is underway in the digital asset space—the dramatic boom-and-bust cycles of the traditional four-year pattern are gradually giving way to more rational fluctuations characteristic of a mature market. VanEck’s analysis points to a clear direction: while 2026 may not see the same frenzy as 2025, the market’s foundations will be stronger, and real value will be forged during periods of consolidation.
The Bitcoin market is transitioning from adolescence to adulthood, with high volatility giving way to more sustainable growth. For investors who understand this shift, the consolidation phase in 2026 could be the ideal time to position for the next cycle.
