Galaxy Research: Bitcoin Bear Market Bottomed Out in June, Hot Money Has Dried Up, Selling Pressure on Older Coins Has Halved, Now Is the Time to Accumulate and Hold
Author: Alex Thorn (Head of Global Research, Galaxy)
Compiled by: TechFlow
TechFlow Editorial: As markets cycle between frenzy and stagnation, true macro strategic inflection points are often quietly established in unnoticed valleys. In this in-depth research report, Galaxy Head of Global Research Alex Thorn uses multi-dimensional data to demonstrate why now is the optimal window to buy and hold Bitcoin for the long term.
Technically, the iron-clad support of the 200-week moving average was tested again, reclaiming the 50-week moving average after a 44-week consolidation, strongly resonating with the bottoming time window of the four-year halving cycle;
In terms of chip and capital structure, CME futures and 13F filing data show that hot money previously driven by basis arbitrage and macro speculation has largely exited, while sovereign wealth funds and long-term allocation pools continue to accumulate, making the post-washout position structure increasingly robust;
Macroeconomically, US federal debt has surpassed the $40.44 trillion mark, with annual interest expenses reaching $1.28 trillion. The expansion of sovereign debt and credit overdrafts for AI infrastructure are irrevocably driving structural depreciation of fiat currencies;
Sentimentally, Wall Street has for the third time fallen into the cognitive trap of "blockchain over Bitcoin," ignoring the fundamental value of censorship-resistant, non-sovereign native hard assets amidst the mania surrounding stablecoins and asset tokenization.
History proves that every divergence between technological mania and asset neglect gives birth to Bitcoin's next magnificent super bull cycle.
This research alert was initially sent directly on October 22, 2026, to clients of Galaxy Trading and Galaxy Asset Management. Please note that all data and prices cited herein are as of October 22, 2026. By trading or investing with Galaxy, you can receive the most timely research directly in your inbox.
Executive Summary
Bitcoin traded at $81,391 yesterday (Thursday, October 22), down 3% from Wednesday's close of $84,176. Based on Thursday's price, Bitcoin has retraced 35% from its all-time high reached in October 2025, and is up 39% from the low it touched on June 30, 2026. We believe this bear market officially ended in June, and Bitcoin is currently in the necessary chip accumulation phase that precedes each major bull run.
Technically, support at the 200-week moving average held firmly, while the 50-week moving average has been successfully reclaimed for five consecutive weeks. On day 916 of the halving cycle, Bitcoin has smoothly passed the typical time window for bottom formation seen in previous cycles.
The position structure indicates that selling pressure has largely been cleared: basis arbitrageurs and macro trend-following speculators who were long at the October 2025 highs have cut more than half of their ETF and futures exposures, while other long-term holders have largely chosen to stick with their coins. In contrast, global equities are near all-time highs, and Bitcoin needs only a 53% gain to reclaim its peak.
The fundamental logic is growing stronger: a sovereign nation burdened with 5% treasury yields and running an annual $2 trillion fiscal deficit faces a rising probability of engineering fiat depreciation within the medium term. Shorting equities and hard assets today is essentially a bet on fiat currency, which is precisely the only illogical position in the current macro environment. Furthermore, market sentiment has for the third time swung toward the "blockchain over Bitcoin" narrative; in both prior instances of such a shift, it invariably marked a historical cycle bottom.
Our conclusion is clear: we firmly believe that now is a highly attractive strategic window to buy and hold Bitcoin for the long term.
At the end of last month, I attended Korea Blockchain Week, a spectacular industry event that fully showcased the massive and growing interest of the Korean market in digital assets. Despite the high energy on site, the conference's core agenda was highly concentrated on a single theme: the deep integration of digital assets with traditional capital markets.
The conference arranged dozens of panel discussions on tokenization, real-world assets (RWA), stablecoins, and payment infrastructure upgrades. I participated in one of the few panels dedicated to the Bitcoin and crypto asset markets. This inevitably brought back memories of the Consensus conference held in New York in 2018, where suit-and-tie professionals from the three consulting giants were everywhere, enthusiastically discussing "enterprise blockchains" like R3 Corda and IBM Hyperledger.
After the 2017 peak crash, the sentiment pendulum swung just as violently away from Bitcoin and cryptocurrencies toward the concept of "blockchain technology," which posed less threat and appeared more "mature." Going back even further to 2015-2016 (another deep bear market cycle trough), from my observational standpoint at Fidelity Investments at the time, the market was filled with the exact same sentiment: no one wanted to mention Bitcoin, but bankers were intensely enthusiastic about "blockchain."
Social backlash triggered by the Silk Road incident ("Bitcoin is a criminal's tool") and the stigma from the ICO bubble burst ("Crypto is a scam"), intertwined with the obvious efficiency advantages of underlying technologies, drove various financial institutions to distance themselves from bearer assets, censorship resistance, and permissionless finance, instead turning toward compliance-driven transformations with greater "social reputation." Back then, Bitcoin and cryptocurrencies certainly did not die, but just like today, public and capital attention dramatically shifted away from the core ethos of decentralization, focusing instead on a far less disruptive concept: upgrading the technological foundation of traditional financial systems.
Although Wall Street's attempts to embrace blockchain in 2016 and 2018-2019 ultimately yielded minimal results, this time will likely be different. The current institutional embrace of digital assets and blockchain technology is undeniable and may very well lead to a significantly more efficient financial system. Even so, the logic of non-sovereign, censorship-resistant hard money should never be forgotten, as it will never fade away on its own.
Technical Analysis: Bottom Established, Accumulation Underway
Every Bitcoin bear market has followed a clear and reliable nautical chart: the 200-week moving average serves as a solid floor, while the 50-week moving average acts as a pressing ceiling.
In the week ending November 16, 2025, the price broke below the 50-week moving average and hovered beneath it for a full 44 weeks. The low in June of this year tested the floor support and held: the worst weekly close was only 4.7% below the 200-week MA (compared to 1.4% in 2015, 2.8% in 2018, and 32% in 2022). In the week ending September 20, 2026, the price reclaimed the 50-week MA above; as of the week ending October 18, it achieved a fifth consecutive weekly close above it. In every complete bear market since 2011, the first sustained break above the ceiling occurred after the cycle bottom was confirmed (Figure 1). Thursday's spot price of $81,391 is 6% above this average, and the pullback since Wednesday's close does not pose a substantive threat to the breakout.
Figure 1: Weekly closing prices of Bitcoin relative to the 50-week and 200-week moving averages since 2016. Bitcoin lost the 50-week MA in the week ending Nov 16, 2025, retraced in June to test the 200-week floor support (worst weekly close deviation -4.7%), and reclaimed the 50-week MA in the week ending Sep 20; it has closed above it for five consecutive weeks through the week ending Oct 18. The hollow marker represents the spot price at 19:51 UTC on Oct 22, 6.3% above the 50-week MA.
What is the probability of another sharp decline following a successful MA reclamation? Reviewing the 13 reclamation cases since 2011, the watershed for subsequent trends lies in how long the price had previously stayed below the average. Four cases that ended drop cycles lasting 20 weeks or more show extremely strong regularity:
First, in the following year, weekly closes never fell more than 8.4% below the breakout level;
Second, one year later, price gains reached +1497%, +128%, +55%, and +142%;
Third, all re-established new all-time highs within 33 to 83 weeks.
In the other 9 recaptures that ended pullbacks of 14 weeks or less, 7 saw prices fall more than 25% again within a year. The reclamation in September this year ended a prolonged 44-week downturn (Figure 2), making this historical pattern highly referenceable.
Figure 2: Post-reclamation trend tracking for each reclamation above the 50-week MA since 2011 (base set at 100 for the weekly close of the reclamation week, tracked over one year). In the 4 recaptures ending drop cycles of 20 weeks or longer, subsequent weekly closes never retraced more than 8.4% below the breakout; in the 9 recaptures following shorter breakdown periods, 7 saw falls exceeding 25% within a year. The September reclamation this year ended a prolonged 44-week oscillation below the average.
The four-year halving cycle also corroborates this assessment. In the first three complete cycles, cycle bottoms occurred on day 777, day 889, and day 912 post-halving, respectively; the lowest point of this cycle so far came on day 802 post-halving, with yesterday marking day 916. Extrapolating from these inflection points, previous cycles saw gains to the next peak of 87x, 19x, and 7.6x, respectively (we do not make specific predictions on this diminishing multiplier pattern), but the cyclical directional trend has never failed (Figure 3).
Figure 3: Relative performance across halving cycles, baselined to the closing price on halving day. Bottoms for the first three complete cycles occurred on days 777, 889, and 912 post-halving; yesterday marks day 916 for this cycle, with the lowest closing price occurring on day 802. Hollow markers represent yesterday's spot price.
This bear market is the shallowest drawdown on record (-53%, compared to -93%, -85%, -84%, and -77% in prior cycles) and is historically the first cycle where price never broke below the network-wide cost basis: the Market Cap to Realized Value ratio (MVRV) bottomed at 1.10, whereas in the previous three major bottoms it reached as low as 0.56, 0.69, and 0.75.
The average cost basis for chips that stabilized and bounced the price from $58,525 is $74,811; the price first closed back above this cost baseline on August 19 (Figure 4), when the line stood at $69,268. Based on yesterday's price, the unrealized profit for this cohort of holders is approximately 9%, and the Spent Output Profit Ratio (SOPR) is merely 1.009, with no wave of large-scale profit-taking—a hallmark characteristic of a typical accumulation phase.
Figure 4: Daily closing price relative to realized price and short-term holder cost basis since 2023. The closest price got to realized price during this bear market was still +10% higher; price reclaimed the short-term holder cost line on August 19, with Thursday's spot price sitting ~9% above this baseline.
Meanwhile, selling pressure capping the 2025 bull market top is rapidly fading. Dormant chips untouched for 5 years or more flowed out at a rate of 67,000 BTC per month in 2024 and 47,000 BTC per month in 2025. Cumulative transfers since October 2024 reached 1.11 million BTC, the largest ancient chip distribution in history across all cycles, with the vast majority absorbed by spot ETFs and publicly traded Bitcoin Digital Asset Treasury (DAT) companies. Entering 2026, this sell-off pace has slowed to 34,000 BTC per month, just 50% of the 2024 peak level (Figure 5).
Figure 5: Number of Bitcoin spent each month that have been dormant for over 5 years (categorized by coin age at transfer). Average monthly outflow has declined from 67k BTC in 2024 and 47k BTC in 2025 to 34k BTC year-to-date in 2026.
Capital & Position Structure: Speculative Hot Money Exits, Long-Term Foundation Remains, Other Assets Priced Near Perfectly
The structure of the futures market clearly reveals how low the current allocation of macro hot money to Bitcoin is.
According to TFF positioning data published by the U.S. Commodity Futures Trading Commission (CFTC), asset managers' net long positions on CME Bitcoin futures once reached 43,300 BTC during the week they hit record highs, but now stand at just 18,400 BTC (a -57% decline); net short positions by leveraged funds (i.e., futures-side shorts for cash-and-carry arbitrage against spot ETFs) have also shrunk dramatically from 71,400 to 30,600 BTC; total open interest across the market, measured in USD, plummeted 51% (Figure 6).
The arbitrage spreads providing substantial returns for the aforementioned short positions are nearly exhausted: in the 30 days before the peak, the annualized yield of near-month contract basis averaged 7.9%, 3.9 percentage points higher than 3-month Treasuries; over the 30 days ending October 21, this spread narrowed to an annualized 4.8%, only 0.6 percentage points above Treasuries (Figure 7).
Although the forward curve retains some yield room (at the close on October 21, the annualized basis rates for November and December contracts were roughly 6.3% to 6.5%, ~2 percentage points higher than Treasuries before friction costs), basis arbitrage traders can absolutely not capture gross yields in full. ETF management fees, monthly roll costs, and margin opportunity costs required to be held at clearinghouses will consume several percentage points, leaving a final net yield only ~1.5 percentage points above cash; by comparison, during the month of the all-time high, the identical arithmetic model left ~3 percentage points of excess net profit, with even higher yields when near-month contracts annualized at 9.8% at the top.
Once the spot long side leverages via SOFR plus a spread, the additional return from leverage becomes negligible; the meager residual spread cannot possibly compensate for potential tail risk: for instance, in December 2022, the CME basis deeply inverted to an annualized -31% (Figure 7). It is precisely this arithmetic reversal of returns versus risk that drove multi-strategy hedge funds out, rather than price volatility itself.
Figure 6: Net positioning on CME Bitcoin futures by trader category (in BTC). Net longs by asset managers contracted 57% from the week of record highs, and net shorts by leveraged funds contracted 57%; open interest denominated in BTC fell 28%, while denominated in USD it fell 51%.
Figure 7: CME near-month basis (30-day annualized average) relative to 3-month Treasury yields since 2020; shaded area represents excess yield space for cash-and-carry vs Treasuries. Basis was 3.9 pp above Treasuries in the 30 days before the peak; over the 30 days ending Oct 21, it was only 0.6 pp above.
Quarterly 13F filing data from investment institutions reveals the true profile of institutional sellers: the vast majority are basis arbitrageurs and macro transitory capital. At the end of Q3 2025 (the last quarter-end before hitting record highs), reporting institutions collectively held spot ETF shares equivalent to 355,000 BTC, declining to 307,000 BTC by Q2 2026 (a -14% drop). Nearly all reduction in holdings came from multi-strategy funds, macro hedge funds, proprietary basis trading desks, and investment bank trading accounts using ETFs for arbitrage and momentum trading. Millennium Management, Brevan Howard, Goldman Sachs Group, Capula Management, Farallon Capital, D. E. Shaw, Schonfeld Strategic Advisors, Symmetry Investments, and Tudor Investment Corp reduced positions by 29% to 100%, totaling a combined reduction of 68,000 BTC.
This figure even exceeds the total net decrease of 48,000 BTC across all 2,200 reporting institutions nationwide, meaning the remaining reporting institutions were net buyers overall (Table 8). Wealth management platforms and sovereign wealth funds absorbed chips sold by speculative transients (Morgan Stanley Wealth Management, UAE's Mubadala Investment Company, and the Abu Dhabi Investment Authority all increased holdings; Horizon Kinetics opted to hold firm); and amidst a 49% price collapse, non-reporting base positions composed of registered investment advisors, family offices, and high-net-worth individuals decreased by only a marginal 6.6% (Figure 9).
From peak to trough, aggregate spot ETF holdings shrank only 11%, while the price dropped 53% concurrently; since the June low, ETFs have net accumulated an additional 87,000 BTC, while leveraged fund short positions continued to steadily decline. This capital flow clearly exhibits directional long-buying characteristics, rather than cash-and-carry arbitrage funds (Figure 10).
Table 8: Position changes for notable 13F reporting institutions from Q3 2025 to Q2 2026. The 9 large hedge funds in the first group collectively reduced 68,000 BTC, surpassing the total drop of 48,000 BTC across all reporters, indicating the remainder of reporters net accumulated 20,000 BTC overall.
Figure 9: Total Bitcoin held by US spot ETFs at each full quarter-end (split between 13F reporters and other holders). From Q3 2025 to Q2 2026, 13F reporter holdings fell 14%, and the top 10 reporters' holdings contracted 17%; amid a 49% price drop, non-reporter base holdings decreased by only 6.6%.
Figure 10: Bitcoin holdings vs. price trend since the launch of US spot ETFs. From the Oct 9, 2025 peak to the July 13 trough, ETF holdings fell only 11%, while the price crashed 53% concurrently; since the June low, ETF holdings have increased by another 87,000 BTC.
This explains why most panic events this year did not trigger large-scale selling of Bitcoin, and simultaneously constructs a highly attractive relative value logic. The S&P 500 is currently just 0.8% away from its record high set on Oct 6, the Nasdaq 100 is just 4.5% off its peak, and gold has fallen 22% from its January highs. Based on Thursday's closing price, Bitcoin sits 35% below its own all-time high, meaning it needs only a 53% gain to return to last year's trading range (Figure 11).
The only alternative to all these risk assets is cash. Choosing to short equities and hard assets today is synonymous with betting on fiat currency; however, fiat issuers have long announced through an annual $2 trillion fiscal deficit and a 10-year Treasury yield nearing 5% that fiat will inevitably suffer continuous dilution. This is precisely the only investment stance with absolutely no footing in the current global macro environment.
Figure 11: Comparison of latest closing prices across major markets relative to their highest closes since 2020 (Bitcoin based on spot price $81,391 at 19:51 UTC on Oct 22). S&P 500 is just 0.8% away from its record high set on Oct 6; Bitcoin remains 35% below its historical peak, presenting a 53% recovery upside.
Fundamental Logic: Case for Fiat Depreciation Stronger Than at Previous All-Time Highs
As of October 20, 2026, US federal government debt has surged to $40.44 trillion, a significant expansion from $23.2 trillion at the start of 2020; FY2026 closed with a massive $1.99 trillion deficit, amounting to 6.2% of GDP, with annual government interest expenses already reaching $1.28 trillion (Figure 12).
The bond market has begun demanding risk compensation: on October 5, 2026, the 10-year US Treasury yield touched 5.31%, hitting its highest level since 2007. Facing a 3.7% CPI inflation rate and 5.7% M2 growth, the Federal Reserve was forced on September 16, 2026, to raise the benchmark rate to 3.75%-4.00%. A sovereign government maintaining a deficit equal to 6% of GDP while refinancing $40 trillion in debt at a 5% cost faces mounting pressure to dilute debt through inflation, with historical trajectories repeatedly pointing to this outcome. Every episode of systemic liquidity stress ultimately forces central banks to resume their role as the lender of last resort, just as witnessed during the 2020 pandemic crisis and the March 2023 banking crisis.
Figure 12: Trend of total US federal debt and annualized federal interest expense since 2000. Since early 2020, federal interest expense has spiked to 2.4x its original level.
The global artificial intelligence (AI) infrastructure arms race, typically viewed as competing with Bitcoin for capital, is essentially a powerful fiat depreciation machine: Morgan Stanley estimates AI-related debt issuance will reach $570 billion in 2026, and approximately $1.5 trillion of infrastructure development through 2028 must rely on external financing. If these massive investments achieve expected returns, it presupposes large-scale credit expansion; if investments ultimately fail to recover costs, those debt losses will inevitably be socialized across the system. Under either scenario, the supply of credit instruments representing future claims on wealth is expanding substantially, which conversely only drives up the intrinsic value of non-sovereign hard money assets with a fixed supply.
The second core fundamental logic is older than any interest rate cycle: as technical capabilities to monitor, freeze, or rewrite fund flows continuously strengthen, human demand for un-freezable, un-monitored, and un-tampered currency rises accordingly, while AI technology makes the cost of implementing such comprehensive surveillance drastically low. Whether tokenized bank deposits or centralized stablecoins, they possess inherent attributes that allow them to be frozen at any moment from system design inception; Bitcoin is the world's sole unheld asset of massive scale with no centralized issuing entity. As the global financial system accelerates toward programmable money and universal surveillance, demand for ultimate safe-haven assets only grows.
Sentiment Cycle: Sentiment Pendulum Swings Third Time Toward "Blockchain Over Bitcoin"
In past cycles, mainstream traditional finance has twice fervently embraced underlying technology while dismissing Bitcoin itself.
Between 2015 and 2016, the R3 consortium formed by major international banks and The Economist's famous "Trust Machine" cover article made "blockchain over Bitcoin" the most respectable consensus stance among financial elites. At the time, Bitcoin's lowest weekly close was merely $231, with subsequent cycle peaks reaching 83 times higher.
Between 2018 and 2019, the market narrative evolved into "blockchain over crypto." JPM Coin from JPMorgan and Facebook's Libra project made high-profile debuts, while Bitcoin, plunging to a desperate low of $3,195, was widely considered dying by the mainstream. Yet, the subsequent bull market peak rose another 20 times from that bottom.
The 2026 iteration shifts to "stablecoins and tokenization over Bitcoin": mainstream banks are intensively piloting tokenized deposits, the CLARITY Act faced hurdles during a motion to close debate on September 15, and generative AI almost monopolizes the entire market's growth narrative. Historical patterns indicate that whenever the sentiment pendulum swings this extremely, Bitcoin typically finds itself within one year of a cycle low (Figure 13).
Figure 13: Weekly price performance during historical periods where mainstream financial institutions embraced tech but abandoned native assets. Following the lows of the first two narratives, Bitcoin subsequently recorded cycle tops 83x and 20x higher than those bottoms.
The 2026 swing is vividly reflected in on-chain data. Dollar liquidity has mass-chained: since early 2024, the circulating supply of stablecoins globally has surged 129% to a massive $304 billion. Meanwhile, the core asset Bitcoin, originally intended to be carried and settled on these blockchain rails, still trades a third below its all-time high (Figure 14). This fully demonstrates that a vast reserve of dry powder (wait-and-see capital) is simply residing inside the crypto ecosystem waiting for its moment, and has by no means permanently exited the market.
Figure 14: US dollar stablecoin circulation volume (source: DefiLlama) vs. Bitcoin weekly closing price trend. Since early 2024, stablecoin supply grew significantly by 129% to $304 billion, while Bitcoin price remains 35% below its historical peak.
Network heat data further corroborates extreme market neglect: on October 13, 2026, Google search热度指数 for "Bitcoin" hit a multi-year low; the Fear & Greed Index (Alternative.me data), which peaked at 71 in October 2025, plunged to a freezing 5 in February 2026 and read just 15 at the June bottom; net cash flows into spot ETFs this month are nearly stagnant. Yet, in an environment of near-total market indifference, Bitcoin has quietly rebounded 39% from its lows. This is precisely a classic eve of a bull market—universally ignored, underweighted by institutions, yet steadily accumulating upward momentum.
Potential Risks & Mitigants
Drawdown Risk: Bitcoin remains vulnerable to further declines at any time. Should global traditional financial markets experience a severe selloff (e.g., due to anxiety over an AI bubble burst or unexpected geopolitical conflicts), Bitcoin could similarly face tightening liquidity and retracement resistance.
Mitigants: Across the 4 historical instances of reclaiming the 50-week MA after prolonged breakdowns, subsequent worst-case weekly close drawdowns never exceeded -8.4% below the breakout level (Figure 2), and historically each bear market drawdown has been noticeably shallower than the preceding cycle (Figure 15).
Our risk warning trigger threshold is: if the weekly close drops below the 50-week MA ($76,540, 6% lower than yesterday's spot price) and fails to reclaim it within a month, it signals a failed MA reclamation setup. Furthermore, macro speculative capital's extremely low exposure to BTC will substantially mitigate spillover impacts on Bitcoin during drawdowns in traditional risk assets.
Figure 15: Drawdown magnitude from all-time highs across cycles (over 400 days). The current cycle's max drawdown of 53% is the shallowest on record; on Day 381, spot price drawdown from the ATH narrowed to -35%.
Artificial Intelligence Risk: I identify three potential risk transmission paths AI poses to the industry:
First, capital siphoning competition (Nasdaq 100 index up 18% YTD, while Bitcoin fell 7% concurrently);
Second, AI-enabled automated hacking and advanced social engineering fraud (total stolen crypto assets reached $3.4 billion in 2025, with Q3 2026 alone seeing ~$1.1B-$1.3B stolen, including a $387.5M attack on Bitget, theft of ~$91M via compromised Ledger hardware wallet distribution channels pre-infected with backdoors, and exploitation of Coldcard mnemonic entropy vulnerabilities to steal 1,837 BTC from 9,218 addresses);
Third, potential macro risk asset liquidity selloff stampedes triggered by an AI bubble burst.
Mitigants: None of the aforementioned security incidents breach Bitcoin's underlying protocol security; damage has been limited exclusively to centralized exchanges, third-party supply chain vendors, hardware endpoints, or end-user devices;
AI infrastructure construction heavily relies on debt financing and government tax subsidies (approx. $570 billion in AI-related bonds issued this year, plus a tax policy implemented since July 2025 allowing full expensing of server and chip purchases in the acquisition year, which will create an estimated $363 billion fiscal hole over a decade), further exacerbating federal deficits and making fixed-supply assets all the more precious;
Additionally, AI does not undermine the mathematical foundations of the SHA-256 hashing algorithm or elliptic curve digital signature algorithm. Even if an AI investment bubble burst pressures the market, it will ultimately force the Fed to restart liquidity printing, which exactly validates and reinforces Bitcoin's core thesis rather than negating it.
Quantum Computing Risk: Currently, 7.1 million BTC (35% of total supply) resides in UTXOs where the public key is directly exposed on-chain (Figure 16).
However, cryptographically relevant quantum computers (CRQCs) capable of posing actual threats simply do not exist in reality: the largest elliptic curve key successfully broken on quantum hardware to date is only 15-bit, whereas Bitcoin employs 256-bit encryption strength; Google's most advanced quantum chip possesses just 105 physical qubits, falling drastically short of the minimum 500,000 physical qubits required for a breakthrough, as noted in its own March 2026 academic paper.
A specialty report released by Galaxy Research in March 2026, "Bitcoin Is Casually Adapting to the Quantum-Ready Challenge," explicitly states: "The quantum risk is real and thoroughly understood by the industry; premier experts best equipped to address it are pushing forward with mitigation work." Relevant defensive development has received ample specialized funding:
The BIP-360 output type specification featuring quantum-resilient properties was formally merged in February 2026; the Bitcoin Quantum Ready Initiative Fund established by Galaxy pledges up to $5 million; the Bitcoin Security Consortium comprising 9 industry players (including Galaxy) commits $15 million in funding over three years. Every underlying cryptographic system across global traditional banks and financial institutions faces the identical quantum upgrade countdown, and Bitcoin's quantum migration plan will likely emerge as the most advanced and best-funded global exemplar.
Figure 16: Unspent Bitcoin with public keys already disclosed on-chain (categorized by source). A combined 7.1 million BTC (35.4% of total network supply) feature exposed public keys, of which 1.7 million belong to Satoshi-era Pay-to-Public-Key (P2PK) outputs.
Signals That Would Invalidate Our Bullish View
Potential signals that could invalidate our bullish stance include: a weekly close breaking below the 50-week MA ($76,540) without reclamation within a month; US spot ETF holdings falling below the July 13 low of 1.22 million BTC; the emergence of a credible, timeline-bound roadmap for practical quantum computing capable of breaking cryptography; or sudden, substantive fiscal consolidation and deficit reduction by the US federal government. In current reality, not the slightest sign exists for any of these assumptions.
We firmly believe that the market cycle bottom has been established, selling pressure from multiple fronts has substantially exhausted, the fundamental logic for macro fiat depreciation is sturdier than ever, and fickle, herd-like speculators have largely departed; all of this constitutes the solid foundation for our unwavering bullish conviction on Bitcoin's future.
Bitcoin has already thoroughly proven its capability to rally to at least $125,000; we have no reason to doubt it cannot reclaim this price territory. In fact, the current overarching technical and macro landscape is highly favorable.
Alex Thorn, Head of Global Research at Galaxy
New York
October 22, 2026