Bitcoin\u2019s (BTC) recent pullback may be less about crypto\u2011specific weakness and more about macroeconomic fears, according to Andr\u00e9 Dragosch, Bitwise\u2019s Head of Research for Europe.\u00a0<\/p>\n
In a social media post published Wednesday, Dragosch argued that the world\u2019s largest cryptocurrency appears to be pricing in a potential deep US recession. If that downturn ultimately fails to materialize, he suggested, Bitcoin could be positioned for a significant rebound.<\/p>\n
Dragosch described <\/a>Bitcoin as fundamentally a macro\u2011driven asset. Historically, he estimates that roughly 90% of its performance can be explained by broad economic forces such as growth expectations, global liquidity conditions and monetary policy trends.\u00a0<\/p>\n However, he acknowledged that there are periods when Bitcoin temporarily decouples from these drivers. In his view, the market may currently be in one of those transitional phases.<\/p>\n Part of the recent divergence, he noted, may stem from concerns unrelated to traditional macro factors. Some market participants have pointed to what Dragosch referred to as a \u201cquantum discount.\u201d\u00a0<\/p>\n This narrative suggests that long\u2011term holder selling<\/a> and speculation about the eventual emergence of quantum\u2011resistant cryptography could be weighing on Bitcoin\u2019s valuation.\u00a0<\/p>\n He observed that Bitcoin\u2019s relative underperformance compared with Bitcoin Cash (BCH), which is perceived to have a clearer near\u2011term roadmap for quantum resilience, may reflect that line of thinking.\u00a0<\/p>\n By his rough estimate, markets could be assigning as much as a 25% probability to quantum\u2011related risk, whereas he believes a more realistic discount would be closer to 5%, given that any meaningful \u201cQ\u2011Day\u201d threat likely remains far in the future.<\/p>\n More recently, Dragosch said Bitcoin\u2019s sensitivity to macroeconomic developments <\/a>has begun to increase again. That shift has coincided with weakness in software equities, adding further downward pressure to the cryptocurrency.\u00a0<\/p>\n In his assessment, the latest correction has produced one of the largest macro mispricings in Bitcoin\u2019s history. He pointed to residuals between forward\u2011looking economic indicators and Bitcoin\u2019s implied growth pricing, noting that the current gap is even more pronounced than during the COVID\u201119 recession in 2020.<\/p>\n In practical terms, Dragosch believes Bitcoin\u2019s current valuation reflects expectations of a deep US recession. Should such a downturn fail to occur, he argues that the resulting setup could represent one of the more asymmetric risk\u2011reward opportunities seen in Bitcoin to date.<\/p>\nRare Macro Mispricing Opportunity<\/h2>\n