Bitcoin hits new lows again, 2026 may be a good opportunity to position
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Bitcoin hits new lows again, 2026 may be a good opportunity to position
This article primarily discusses the roles of Bitcoin and AI in the future economy and their impact on risk asset markets, while forecasting market trends for 2026.
Navigating Web3 tides with focused insightsBy: Jordi Visser
Translated by: LlamaC
While the Bitcoin community falls into despair over its consolidation and weak performance relative to equities, I wrote "Bitcoin's Silent IPO," arguing that Bitcoin’s sideways movement during rallies in other assets is frustrating but not a sign of weakness—it is instead a necessary distribution phase. Early whales are finally experiencing their liquidity event, systematically selling into deep institutional demand created by ETFs and corporate treasuries. It’s akin to lock-up expirations in traditional IPOs—uncomfortable and painful, yet ultimately healthy in the long run.
Now, the consolidation pattern has broken. The distribution from the “silent IPO” led to deeper pullbacks, while at the same time, equities have finally begun to correct, led by retail-favorite AI speculation stocks. I emphasized this point in my weekly video last weekend. This shift turned Bitcoin’s year-to-date gains into a slight loss. The cognitive dissonance that once frustrated the crypto community has now evolved into genuine bearish sentiment and skepticism. The optimism of Liberation Day feels like a distant memory. Discussions about the end of the four-year cycle grow louder. Claims that “Bitcoin has lost its upside” echo across X, and those who believed “this time is different” are now capitulating.
This fall, the CMC Fear & Greed Index for cryptocurrencies dropped to 15—the same level seen near Liberation Day. All hope seems lost. Thus, it’s time for Part Two. For me, the core idea of this story remains the same as on Liberation Day. Every asset is being driven by advances in artificial intelligence, and I will continue to argue that all investors will eventually realize in the coming years they missed a major narrative. The purest AI story is Bitcoin.
Beyond their similar birthdays—Bitcoin’s whitepaper was published in 2008, while the 2009 Raina–Madhavan–Ng paper was the first influential study demonstrating GPUs could accelerate deep learning by over 70x, effectively igniting the modern GPU-driven machine learning era—both are part of exponential innovation, each indispensable.
Exponential innovation reduces the need for people to work in offices or even work at all. Exponential innovation leads to unequal wealth distribution, forcing governments worldwide to maintain deficits and pushing financial assets higher as a form of universal basic income (UBI). Today’s UBI isn’t a government check—it’s Universal Beta Income: your wealth grows because the system has no choice. For those without assets, transfer payments serve as another form of UBI. This creates the K-shaped economy we’ve all heard about, where job losses create labor anxiety and wage pressures, and government-driven UBI fuels inflation, leaving most angry due to unaffordable living costs. Bitcoin benefits from this spiraling dynamic, remaining correlated with risk assets before AI begins consuming capitalism and public markets. Stablecoins combined with AI agents increase velocity of money and reduce leverage needs; tokenization enables concentrated, dormant assets like real estate, private debt, private equity, and venture capital to trade freely 24/7, reducing the leverage required to prop up their prices. As AI advances, deflationary pressures will emerge. By 2026, AI-driven drug discovery, autonomous taxis, and AI agents will help drive price increases through higher margins and intensified competition from commoditized intelligence.
And here’s what makes the current moment fascinating: people worried Bitcoin wasn’t keeping pace with equities during rallies, but now its performance aligns perfectly with expectations. As equities correct—especially frothy retail-favorite AI stocks—Bitcoin declines in tandem. The divergence that puzzled everyone during the “silent IPO” has vanished. Bitcoin is once again trading as a risk asset, tied to growth expectations and liquidity conditions. In my view, this is creating the purchasing power and momentum needed to kickstart a new uptrend.
This means that as I look ahead to the 2026 landscape, I see it again: light at the end of the tunnel. Just as April’s tariff scare created a buying opportunity for those who could see through fear, this Bitcoin correction—synchronized with broader risk asset weakness—is laying the foundation for the next major rally.
Why Bitcoin Rising with Stocks Is Bullish
A long-standing misconception is that Bitcoin should trade independently of traditional risk assets. The argument goes: Bitcoin is digital gold, a hedge against the existing system, uncorrelated with equities. Therefore, if Bitcoin falls when stocks fall, something must be wrong.
This is incorrect. Bitcoin is a risk asset. I’ve written about this in my Substack article, “Yes, Virginia, Bitcoin Is a Risk Asset.”
Yes, it has store-of-value properties. Yes, it’s decentralized. But from the standpoint of market psychology and capital flows, Bitcoin behaves like a high-beta risk asset. ETF buyers allocate Bitcoin alongside stocks, and when they de-risk portfolios, Bitcoin gets sold along with equities. Retail traders use the same capital for both crypto and stocks. Even those worried about currency debasement buy more aggressively during periods of strong economic performance and healthy cash flow.
Thus, when the Nasdaq falls, Bitcoin falls. When AI stocks take a hit, Bitcoin takes a hit. This isn’t a bug—it’s a feature. Given its holder base, this behavior is rational.
Here’s why this is bullish: if Bitcoin moves in sync with risk assets, then Bitcoin’s outlook becomes tied to the outlook for risk assets. This means to understand Bitcoin’s future, we must understand where equities are headed.
Let me explain why I’m extremely bullish on risk assets leading into 2026.
The 2026 Landscape: Where Fiscal, Monetary, and AI Converge
Markets climb a wall of worry. Today, that wall is built from AI bubble fears, recession concerns, and crypto pessimism. Yet the 2026 outlook remains compelling.
Fiscal support continues. Infrastructure bills, the CHIPS Act, and the Inflation Reduction Act are not just symbolic—they represent trillions in spending that are generating real economic activity and deficits. This “big beautiful” package was rolled out before midterm elections. Data centers are being built at unprecedented speed, semiconductor fabs are rising, and power infrastructure is being upgraded.
The Fed has room to cut. Inflation is under control. Wage, housing, and oil prices have been under pressure this year, so even as tariff effects appear, inflation should remain manageable relative to a weakening labor market. AI is both deflationary and labor-displacing.
AI breakthroughs are imminent. Over the past year, AI progress has accelerated dramatically. We’re approaching tangible, real-world breakthroughs that will capture mainstream attention:
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AI Drug Discovery: The first AI-discovered drugs are nearing clinical trials. Positive news in this area would have stunning implications for healthcare and economic productivity. So far in November, pharma stocks are having their best month of relative performance in 30 years. Every pharmaceutical company will rush to integrate AI into R&D. Billions will flood into AI healthcare.
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Autonomous Vehicles: After years of being “five years away,” we’re at an inflection point. Waymo is expanding. Tesla’s FSD continues to improve. Chinese firms are deploying driverless taxis at scale. When autonomous vehicles become mainstream in major cities by 2026, speculation around humanoid robots will explode.
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AI Agents and Productivity: AI agents capable of executing complex tasks autonomously will begin permeating enterprise software, customer service, and creative industries. The impact on productivity is massive, expanding profit margins across the economy. AI makes every industry more efficient, more productive, and more profitable.
Manufacturing is expanding. The build-out of AI infrastructure is fueling a revival in U.S. manufacturing. After years of contraction, signs of recovery are emerging. I believe PMI (Purchasing Managers’ Index) will rise in 2026, driven by these catalysts. Historically, when PMI rises, cryptocurrencies—especially altcoins—perform exceptionally well.
Bearish voices will shout “AI bubble!” Maybe. But bubbles always last longer and go higher than expected. The internet bubble didn’t peak in 1997 when valuations first seemed absurd—it peaked three years later, in March 2000. From late 1994 to late 1999, the Nasdaq-100 (QQQ) rose 800%. QQQ has gained less than 100% over the past five years. Compared to the dot-com bubble, this isn’t even close to a bubble. If we’re in an AI bubble, we’re only in the early-to-mid stages. The mainstream hasn’t fully entered yet. Your relatives aren’t asking about AI stocks at Thanksgiving dinner—that comes later. And I believe in crypto.
Bubble bursts require a catalyst, typically aggressive Fed tightening amid economic weakness. But the Fed has already finished tightening. They may start cutting in 2026—not launching a new hawkish cycle. Thus, the classic bursting catalyst is absent.
Bitcoin’s 2026 Catalysts
If risk assets perform strongly in 2026, then as a high-beta risk asset, Bitcoin should significantly outperform the broader market. But there are also Bitcoin-specific catalysts that make its outlook even more compelling.
The Clarity Act: Regulatory uncertainty has weighed on crypto for years. The Clarity Act, expected to pass by late 2025 or early 2026, will provide a clear regulatory framework, establish jurisdictional clarity, and eliminate the legal ambiguities deterring institutional investors. Those who have said “we’re waiting for regulatory clarity”—including some of the largest asset managers and pension funds—will finally get the green light to allocate. Relative to the wave of capital that will follow, today’s ETF inflows will seem negligible.
Tokenization is scaling: Major financial institutions are tokenizing Treasuries, real estate, commodities, and equities. JPMorgan, BlackRock, Franklin Templeton—all are building tokenization platforms. This validates the entire crypto infrastructure and proves blockchains are good for more than just digital gold. As tokenization scales and dormant assets begin trading 24/7 with lower leverage requirements, Bitcoin’s role as a neutral settlement asset—the TCP/IP of digital finance—will become increasingly vital.
Stablecoin acceleration: This is the most underappreciated bullish factor. Stablecoin adoption is exploding globally, especially in developing economies. Tether and USDC are becoming dollar payment rails for much of the global economy. When someone in Nigeria receives USDC instead of naira, when Argentine businesses hold dollar-denominated stablecoins instead of pesos, when cross-border payments occur via stablecoins rather than correspondent banks, crypto infrastructure becomes essential to global commerce.
Stablecoins and Bitcoin aren’t competitors—they’re a two-part system. Stablecoins are the medium of exchange in the digital economy, while Bitcoin is the store of value. As more activity and capital enter the digital economy, a growing share will naturally flow into Bitcoin. Think of stablecoins as digital M2, and tokenization as the bridge bringing traditional fiat assets into the system. This builds powerful network effects: stablecoin adoption brings millions of new users into crypto, and after using stablecoins, these users will eventually need a place to store value long-term. Bitcoin becomes the default choice. The network effect from stablecoin growth will accelerate Bitcoin adoption in ways that are hard to model but obvious in hindsight.
History Rhymes
Decades of market experience have taught me one truth: initial lows often get retested. We saw this in April—markets bottomed, bounced, then retested the low before moving higher. This is a normal, healthy pattern, as markets need time to build support and shake out weak hands.
I expect Bitcoin may follow a similar path. We may have already touched an initial low, but it’s likely to be retested in the coming weeks. As the last batch of weak holders capitulates, another wave of selling may emerge. Perhaps there will be one final shakeout, briefly pushing Bitcoin lower.
If a double bottom occurs, it will be the best investment opportunity of the year. Because during a double bottom, smart money that missed the first bottom gets a second chance. A double bottom with shrinking volume and fading panic confirms the initial low was real. I won’t wait for a double bottom. I believe this current zone—during extreme fear and ultra-low greed index readings—is the perfect time to deploy capital, whether for Bitcoin or stocks.
Bitcoin is down this year. Early “silent IPO” OG selling may not be fully done, but it’s in the late stages. Ownership is more distributed than ever. Retail sentiment is bearish and sidelined. ETF buyers are accumulating patiently. Those buying as a hedge against fiat debasement continue systematic accumulation. Developing nations are steadily adopting Bitcoin into their financial infrastructure.
Meanwhile, the 2026 outlook looks exceptionally bright. Fiscal support continues. Monetary policy provides tailwinds. AI breakthroughs will drive both speculation and real earnings growth. Manufacturing is expanding. The Clarity Act will bring regulatory certainty. Tokenization is scaling. Stablecoins are accelerating network effects.
Bitcoin moves with risk assets. Risk assets are poised for strength in 2026. Therefore, Bitcoin is also poised for strength in 2026.
The Light Is There
I always think back to Liberation Day. The S&P 500 was down 20%, economists predicted recession, and people were panic-selling. I believed that six months later, we’d look back and realize the panic was unnecessary. I was right.
Today, I feel the same about Bitcoin. Yes, this correction is painful. Yes, market sentiment is terrible. The Fear & Greed Index is at 15, matching the low of Liberation Day. But corrections within bull markets always feel like the end of the world. Each one seems different. Each one convinces people the rally is over.
And for those who can see through the fear, it’s always a buying opportunity.
In my trading career, I’ve lived through enough crises—Mexico in 1994, Brazil in 1998, the Global Financial Crisis (GFC), COVID-19, Liberation Day—that I know these moments, though unsettling, are never as scary as they appear. One truth stands out: if you can see through fear, these periods offer the best investment opportunities.
Bitcoin hasn’t broken. Digital assets won’t die. What’s happening now makes perfect sense: a maturing risk asset still recovering from the 2022 winter. During this period of uncertainty and position adjustment, it’s correcting alongside other risk assets. Unlike April, this correction is narrower, focused mainly on growth stocks and crypto—not broad-based panic. This is healthier, meaning the market is differentiating. It also means that when recovery comes, it could be faster and more concentrated.
For those who can see ahead, now is the time to accumulate. Not recklessly, not with leverage, not with money you can’t afford to lose. But thoughtfully, based on fundamentals, not emotion, and with conviction.
In an era where AI drives investment alpha, markets will be volatile. Given governments’ struggles to manage this disruptive force, there will be dramatic moments ahead. Doubts will abound. Headlines about crashes and bear markets will dominate. Ignore them. Focus on fundamentals. AI is the most important, most powerful innovation of our lifetime, and it will bring better days in the years ahead.
By the time everyone sees the light, it will be too late to act. Now is crypto’s moment—when the Fear & Greed Index is 15, when the crowd is capitulating, and the tunnel remains dark.
Six months from now, just like Liberation Day, the Bitcoin narrative will be completely different. Looking back at today’s prices and sentiment, we’ll wonder why we ever doubted.
The light is there. You just need to be willing to see it.
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