Bitcoin bear market is likely years away: Trump adviser David Bailey

David Bailey, entrepreneur and Bitcoin adviser to US President Donald Trump, says there won’t be another Bitcoin bear market for several years amid growing institutional interest in the crypto market.

But the four-year cycle says otherwise, and crypto analysts tell Cointelegraph that there are more than a few headwinds that could tank the markets.

It’s the “first time we’ve ever seen real institutional buy in,” said Bailey in an X post on Saturday.

“Every Sovereign, Bank, Insurer, Corporate, Pension, and more will own Bitcoin. The process has already begun in earnest, yet we haven’t even captured 0.01% of the Total addressable market (TAM). We’re going so much higher. Dream big,” he added.

He said earlier institutional interest was just “outliers with marginal bets.”

Bailey, founder of Bitcoin Magazine and BTC Inc., served as an adviser during Trump’s presidential campaign and is credited with being a central figure in the president’s Bitcoin pivot.

Over the last two years, institutions have steadily gained exposure to crypto through investment vehicles like exchange-traded funds (ETFs) and establishing crypto treasuries — with total holdings surging past $100 billion, made mostly of Bitcoin (BTC).

Reasons for a crypto bear market

A June report from venture capital (VC) firm Breed suggested that few of these treasury companies would survive long term, which could trigger the next crypto bear market.

Speaking to Cointelegraph, ZX Squared Capital co-founder and chief investment officer CK Zheng said crypto is still highly correlated with the stock market; if it slows into a bear market, “crypto will follow.”

Earlier this year, the stock market nearly slipped into a bear market, but according to Zheng, it rebounded, and there have been several developments since that lower the odds of a repeat.

“The question is for the remainder of the year, whether the bear market is going to happen or not, and that’s an interesting discussion, but my personal view is it’s probably unlikely, especially after the Fed pivoted to lower interest rates, and Jerome Powell’s speech last Friday,” he said.

“Right now it’s one of the biggest signals in terms of the Fed willing to cut the interest rate, most likely, in September, and that’s probably the beginning of a low-interest-rate cycle, given the economic data and the labor market softening.”

Meanwhile, Pav Hundal, lead market analyst at Australian crypto broker Swyftx, said the market has been risk-on and that’s supported a rotation into high-momentum assets like Bitcoin and Ether (ETH).

However he expects to see a re-rotation back into fixed income instruments at some point.

“The path of least resistance is higher for Bitcoin but that doesn’t mean a bear market is years away. Macro shocks come when you least expect them. My suspicion is we keep seeing what we’re seeing, which is decreased price volatility over every cycle,” Hundal said.

“Interest rate rises are politically tricky, but the market expects a rise again over the next year, and that could be a catalyst for a correction.”

End to crypto bear markets a possibility

The last bear market was in 2022, and before that, in 2018. In both instances, a booming bull market preceded the crash.

Ryan McMillin, co-founder and chief investment officer of Australian crypto investment manager Merkle Tree Capital, told Cointelegraph the current base case points to a top around Q2 2026, then “if and when global liquidity reverses around this time, likely triggering a relatively mild bear market by mid-2026.”

“Leverage unwind from debt-fueled Bitcoin buys or a regulatory shock could spark the downturn,” he said.

“The Direct access trading (DAT) and institutional markets add huge pools of demand, but they also come with risks, some of the DATs will be late to the party, overleveraged and not prepared for the volatility that makes this asset class so interesting, potentially being the catalyst of the next bear market.”

However, McMillin says there is also a possibility there will be no bear market at all, “similar to gold post the early 2000s ETF launch as the asset was financialised and up only for 8 years.”

Another factor is the bull market that precedes any bear market; without a parabolic bull market, there can’t be a deep and sustained bear market.

“So far, this cycle moves up have been accompanied by periods of consolidation, leverage is reset, and the bull market continues. If this structure persists, then there is no bear market; there will be regular corrections, which are great buying opportunities,” McMillin added.