Bitcoin’s sharp drop below $60,000, marking its lowest point in the current cycle, has triggered renewed debate over the sources of selling pressure in the market. Greg Cipolaro, Global Head
Bitcoin’s sharp drop below $60,000, marking its lowest point in the current cycle, has triggered renewed debate over the sources of selling pressure in the market. Greg Cipolaro, Global Head of Research at NYDIG, argued in his latest report that no single event can fully explain the downturn, noting that both Bitcoin and the wider crypto market are grappling with several overlapping negative factors.
At the heart of Cipolaro’s analysis is the surge in artificial intelligence-themed investments. He pointed out that Bitcoin now faces direct competition for capital from the AI sector, which has quickly become the most prominent growth story of recent times. Cipolaro believes investors drawn to both crypto and AI are more interconnected than many assume, with both sectors appealing to those in pursuit of emerging technologies and high returns. As AI-related stocks continue to outperform, some capital appears to be rotating out of crypto and into AI investments.
The report also highlights that investors could be preparing for the biggest wave of tech IPOs in years. Companies like SpaceX, OpenAI, and Anthropic are all rumored to be eyeing stock market debuts, with SpaceX reportedly furthest along in the process. Cipolaro notes that institutional investors may be reducing existing positions to free up cash ahead of these large-scale IPOs, adding further pressure on demand for crypto assets.
Mini glossary: An IPO, or Initial Public Offering, occurs when a company lists its shares for the first time on a stock exchange. Major tech IPOs can influence the distribution of liquidity across markets.
Market conditions affecting crypto prices do not stop at macro trends. US Treasury official Scott Bessent revealed that the US authorities had seized roughly $1 billion in crypto assets tied to Iran, raising new questions about government ability to access and regulate the digital asset space. While details remain limited, Cipolaro suggested this may have caused some investors to question a central tenet of the crypto narrative—resistance to governmental oversight.
Quantum computing has also returned to the spotlight. A new study by researchers indicated that the computing power required to breach widely used cryptographic systems may drop more quickly than previously expected. This renewed discussion has sparked fresh debate among investors about the long-term security of crypto assets.
Cipolaro also drew attention to a 32 BTC sale by the institutional investment firm Strategy. Although the $2.5 million sale had only a limited effect on supply, its psychological impact on the market could be greater. Strategy has long been seen as a steadfast buyer; speculation that it could become a source of supply may undermine a key pillar supporting bullish sentiment.
While none of these developments alone can fully account for a major correction in Bitcoin, taken together they help explain the recent weak price action—even though key adoption indicators do not yet show clear deterioration, as Greg Cipolaro observed.
Insights drawn from onchain data present a mixed picture. According to Cipolaro’s report, some indicators are nearing levels historically associated with major market bottoms. Bitcoin’s MVRV ratio has dropped to 1.2, a figure that shows the market value is close to the aggregate cost basis of investors—a zone often linked to capitulation phases. The percentage of supply held in profit also dipped below 50% recently, another sign previously correlated with periods of investor surrender.
Nonetheless, the current decline remains relatively mild in historical context. Since hitting a peak of $126,000 in October, Bitcoin has fallen roughly 53%. Cipolaro noted that this compares to past drawdowns of 75% to 90%, suggesting that this pullback is less severe than those in previous cycles.
Timing is another key factor. The last three Bitcoin bear markets lasted approximately a year from peak to trough, with only the first in 2011 ending after 163 days. The latest drop below $60,000 came just 242 days after Bitcoin’s most recent peak, potentially indicating a shorter cycle or a different market dynamic at play.
Given these factors, Cipolaro proposed that growing institutional participation may have fundamentally changed the structure of Bitcoin’s market cycles—or perhaps the market has yet to pass through a true capitulation phase. Onchain indicators point to a significant reset, but whether a market bottom has formed depends on whether institutional demand has permanently altered cyclical patterns or simply delayed a deeper correction.
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