Every major bitcoin correction brings the same question: Is the bottom finally in? Some say the market has already reset. Others expect more downside. I wanted to see what professional investors at crypto funds are actually saying and doing.
Most investors I spoke with think bitcoin could still move lower. The broader view is cautious, with many pointing to macro uncertainty, weaker liquidity, ETF outflows, and capital rotating into AI and traditional markets as reasons prices could face further pressure.
David Grider, partner at Finality Capital and head of the firm's liquid opportunities fund, said the fund turned cautious on bitcoin and digital assets in early October 2025, when the largest liquidation event in crypto's history occurred, and has remained defensive since. "Our current view is that bitcoin is in the mid-to-late stages of the current market cycle downturn," Grider said. "We don’t see a true market bottom until late Q3 or early Q4 this year."
Even investors who think bitcoin has likely found its bottom aren't expecting a strong rally anytime soon. Richard Galvin, executive chairman and chief investment officer at Digital Asset Capital Management, said he has a "relatively neutral" outlook for bitcoin over the next 12 months, while Cosmo Jiang, general partner at Pantera Capital, said the widely followed four-year bitcoin cycle could still keep the bear market going for a few more months.
The cautious outlook is also reflected in allocator sentiment. Galvin described the mood among limited partners as simply "uninterested," saying strong adoption across several crypto sectors has yet to translate into token performance. Jack Platts, founder of Hypersphere Ventures, said many crypto funds are aiming to widen their mandates as other sectors, including AI, aerospace, health tech, and defense tech, continue to do well.
"Generally, it seems everyone is quite bearish on crypto," Platts said. "Crypto is, simply, just not as exciting as this other stuff."
Still, some long-term investors see the current downturn as a buying opportunity. Laura Vidiella del Blanco, head of investor relations for digital assets at VanEck, said confidence in bitcoin remains strong among investors and limited partners, with many viewing it as a discounted asset while remaining enthusiastic about broader blockchain adoption. Pantera's Jiang shared a similar view, though he said many allocators are waiting for a positive catalyst before increasing exposure.
Andy Martinez, founder and CEO of Crypto Insights Group, also said institutional interest in digital assets remains intact, "but capital is becoming increasingly discerning, while the gap between the strongest and weakest operators continues to widen."
Loren Asmus, head of investor relations at Nakamoto Inc.-owned UTXO Management, said many of the firm's investors have lived through multiple bitcoin bear markets and are discussing increasing allocations while bitcoin remains "out of favor." Sanat Rao, chief investment officer of BTC Fund at FalconX-backed Monarq Asset Management, also said institutional investors in the firm's market-neutral strategies continue to allocate fresh capital despite the broader market weakness. Finality's liquid opportunities fund has also seen "strong positive" investor interest, which Grider attributed in part to the fund's multi-strategy approach spanning blockchain equities, credit, derivatives, and digital assets.
Most funds aren't rushing to buy the dip. Instead, they're holding more cash, reducing directional exposure, and waiting for better opportunities while staying invested in assets they believe have strong long-term fundamentals.
Galvin said Digital Asset Capital Management is holding the highest cash levels in its directional funds since the funds launched and its lowest bitcoin allocation since 2022, while keeping a concentrated portfolio of what it sees as sector leaders over the next three to five years.
Finality Capital has also shifted to what Grider calls a "bear market playbook," focusing on downside protection through debt, derivatives, hedging, and long/short strategies rather than directional bets. However, the firm is re-evaluating these hedges and may take a more neutral stance on digital assets, Grider said. Monarq similarly favors market-neutral strategies over directional exposure in the current range-bound market, Rao said.
Where funds are deploying capital, the focus is increasingly on fundamentals rather than broad market exposure. Luke Lokhorst, portfolio manager at M11 Funds (the liquid arm of Maven 11), said the firm prefers revenue-generating protocols with strong product-market fit and tokenomics, particularly in DeFi. Pantera's Jiang also said the market is becoming more rational, with prices increasingly reflecting fundamentals instead of broad-based rallies, "just like we don't see [those rallies] in the equity markets." Pantera continues to invest and add risk exposure, Jiang said, with a preference for DeFi and AI projects.
Several managers also see opportunities outside crypto. Platts said Hypersphere holds assets in sectors including AI, energy, semiconductors, and rare earths. Jeff Dorman, chief investment officer at Arca, said the strongest blockchain opportunities today are in DeFi, tokenization, and stablecoins rather than bitcoin itself, and Asmus said UTXO Management continues to hold high-conviction bitcoin positions while prioritizing liquidity and allocating to perpetual preferred securities that offer attractive yields with lower-volatility profiles.
When asked what could push bitcoin lower, most funds pointed to higher interest rates, tighter liquidity, geopolitical tensions, and capital rotating into AI and other fast-growing sectors as the most common concerns.
Several managers also highlighted two newer risks that have become increasingly prominent this cycle: Michael Saylor's Strategyand quantum computing. Lokhorst of M11 Funds said the firm's focus is on whether Strategy continues raising large amounts of debt, warning that any pressure on its bitcoin position could send a "powerful negative signal" to the market. Many investors also pointed to quantum computing as one of the biggest risks for bitcoin.
However, some argued the market is overstating the threat. Asmus and Rao both said bitcoin can ultimately be upgraded to become quantum-resistant, making the challenge one of governance and coordination rather than an existential risk to the network.
The list of potential recovery catalysts looked equally familiar. Many investors said lower rates, easing geopolitical tensions, improving liquidity, and progress on the Clarity Act could bring capital back into crypto. Several also expect institutional demand to recover as ETF flows improve and risk appetite expands beyond AI-related equities.
Few funds were willing to put precise year-end targets on bitcoin. Notably, among those that did, none expect bitcoin to finish 2026 above $100,000.
Platts expects bitcoin to trade around $55,000 in his base case, with a $40,000 bear case and an $80,000 bull case. Finality's Grider also expects a volatile path, seeing bitcoin bottoming in the $45,000–$55,000 range before recovering to around $65,000–$75,000 by year-end.
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