Grayscale warns Bitcoin faces further downside risks

• Grayscale said Bitcoin could fall further if the CLARITY Act stalls, the Federal Reserve raises interest rates and digital asset treasuries continue deleveraging.
• The asset manager said Bitcoin has already dropped below US$60,000 but does not expect an 80% bear market decline because of stronger institutional demand.
• Grayscale said easing policy uncertainty, stable corporate treasury positions and unchanged interest rates could help Bitcoin approach a market bottom.

Grayscale said Bitcoin (CRYPTO:BTC) could decline further from below US$60,000 if the CLARITY Act fails to pass this year, the Federal Reserve raises interest rates and digital asset treasury companies continue reducing leverage.

The warning follows a broad cryptocurrency market sell-off that pushed Bitcoin below the US$60,000 level, with exchange-traded fund outflows and market liquidations adding to selling pressure while investors defended a key technical support level.

“If downside risks materialize, we could see bitcoin fall moderately further,” said Grayscale Head of Research Zach Pandl.

Grayscale said a successful passage of the CLARITY Act could reduce regulatory uncertainty and support institutional participation, while delays would leave the market without the clearer federal framework many investors had expected, and the firm also identified higher interest rates and further deleveraging by digital asset treasury companies as additional risks.

The asset manager said Bitcoin may already be close to its cycle low if policy risks ease, corporate treasury balance sheets stabilise and the Federal Reserve keeps rates unchanged, while as Grayscale is a privately held company there was no share price reaction.

The CLARITY Act remains before the US Senate after committee approval but still requires floor debate, possible amendments and at least 60 votes, while lawmakers continue negotiating issues including stablecoin regulation, conflict-of-interest provisions and illicit finance rules.

Grayscale also noted that previous Bitcoin bear markets recorded declines of about 80%, but the firm said it does not expect a repeat of those losses because institutional demand has remained stronger than in earlier market cycles.

At the time of reporting, Bitcoin price was $59,931.49.