Bitcoin’s ($BTC) price decline and negative sentiment across the cryptocurrency market have worried investors. But Muneeb Ali, co-founder of Stacks, has expressed optimism about Bitcoin’s current market cycle. He argued that Bitcoin may have passed its bottom and that the market is in the early stages of a new bull run.
In an interview, Ali commented on Bitcoin’s recent underperformance compared with gold, saying he does not believe the current price movements signal a new bear market.
Ali described the market’s current state as follows:
“I think the bottom for Bitcoin is behind us. We’ve come out of the bear market and are currently experiencing a pullback in the early stages of a bull market. When bull markets start, people aren’t always sure if it’s really begun. It’s quite normal to see pullbacks during these periods.”
The well-known figure noted that although negative news has been mounting, Bitcoin’s price has been reacting to it less and less.
Ali said one major reason may be that many investors who wanted to sell have already closed their positions. He described Bitcoin’s limited decline despite negative developments as a strong market signal and said selling pressure may be starting to ease.
Why Has Bitcoin Lagged Behind Gold?
Ali, who assesses Bitcoin’s valuation by comparing it with gold’s total market capitalization, argued that the long-term growth potential of $BTC has not yet been fully reflected in its price.
Ali, who said he has been part of the Bitcoin ecosystem since 2013, said he had expected Bitcoin’s market capitalization to reach 20 to 30 percent of gold’s by now, but that it remains below 10 percent.
Ali said this gap indicates that Bitcoin has considerable room to grow.
However, Ali said institutional investors’ approach to Bitcoin had weighed on its price performance. He said large financial institutions saw $BTC not as a store of value like gold or real estate, but as a risky investment akin to technology stocks.
Ali said that when appetite for risk in the technology sector falls, institutions also sell their Bitcoin positions. As a result, $BTC moves in tandem with riskier assets such as the Nasdaq rather than with gold.
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Ali remains optimistic about Bitcoin’s long-term upside potential, but also highlighted two significant risks facing the sector: quantum computing and AI-powered cyber threats.
Ali argued that the Bitcoin network needs to respond to these threats more quickly. He said its decentralized structure could be preserved while making software development and updates more organized.
Ali said the next two years will make clearer whether Bitcoin can develop a viable solution to the quantum computing threat and how it will respond to AI-related security risks.
Ali believes these uncertainties are weighing on Bitcoin’s valuation. He argued that if the problems are addressed, $BTC could enter a much stronger upward trend.
What Could Drive Bitcoin’s Next Rally?
The Stacks co-founder said Bitcoin’s transformation from a passive store of value into an income-generating asset could also have a significant effect on its price.
Ali said Bitcoin owners should be able to earn returns in $BTC without selling their assets, or borrow against their Bitcoin. He added that broad adoption of these use cases could boost demand for $BTC.
Ali referred to yield products developed for Bitcoin holders in the Stacks ecosystem. He said institutional investors joined a recently launched program with a total of 1,000 $BTC, and that the current program offers a 3% yield.
Ali believes Bitcoin’s traditional four-year market cycle has not disappeared, but said rises and falls have become less pronounced than in past cycles.
*This is not investment advice.
