Bitcoin Could Drop to $38,000, NYDIG Report Suggests

Bitcoin has underperformed relative to other risk assets this year, with its price dropping nearly 30% from its October all-time high of $126,080 to around $64,809. According to a report by NYDIG, this slump is driven more by supply mechanics than risk sentiment, contrasting with the strong performance of AI-related equities. Historically, Bitcoin's current drawdown resembles previous cycle resets in 2014, 2018, and 2022, suggesting a potential cycle low near $38,000 to $39,000 if similar patterns hold.

The report highlights that Bitcoin's year-to-date performance is the worst among major assets, trailing US treasuries, silver, and currencies like the Swiss Franc. Despite this, some analysts believe the current drawdown may be shallower than past bear markets, especially given Bitcoin's historically low volatility in 2025.

Additionally, Bitcoin's correlation with gold increased during the second quarter of 2026, reinforcing its narrative as 'digital gold.' However, it remains more correlated with US equities, particularly tech stocks, and other commodities experienced sell-offs during the same period.

Looking ahead, NYDIG notes that recent regulatory developments, such as the passage of the market-structure CLARITY Act, could serve as a catalyst for recovery. While the direct impact on Bitcoin's price may be limited, a clearer U.S. market structure is expected to benefit the broader crypto industry.

Overall, the report suggests that while Bitcoin faces short-term challenges, fundamental factors and regulatory clarity could support a recovery in the longer term.