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Bitcoin at current levels may have the potential for outsized returns, according to Bitwise European Head of Research André Dragosch.
“The last time I saw such an asymmetric risk-reward was during Covid,” Dragosch said on X last week, referring to Bitcoin. “Back then, Bitcoin snapped back quickly after the March 2020 shock… and then 6×’d by year-end 2020. Call it a coiled spring, a ball under water – whatever you like. I genuinely think we’re staring at a similar macro setup right now.”
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Dragosch said Bitcoin was pricing in a recession, but he said growth was likely to trend up into 2026, citing monetary stimulus initiatives. He shared a chart of growth priced by Bitcoin against a macroeconomic growth indicator. The chart suggested that Bitcoin was grossly more pessimistic than the leading macroeconomic indicators.
“You’re not even remotely bullish enough,” Dragosch said.
Dragosch’s remarks come as Bitcoin has tanked by as much as 36% from its price record of $126,200 reached in October to trade as low as $80,600 last month. The downtrend was triggered by President Donald Trump‘s announcement of an additional 100% tariff on China on Oct. 10.
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While Bitcoin appeared to have found a base two weeks ago, rebounding to over $93,000, it has since fallen to near its lows to most recently trade at about $86,500.
The recent volatility follows interest rate-hike talks from the Bank of Japan, which have resurfaced concerns about the unwinding of the so-called “yen carry trade.” The yen carry trade involves borrowing yen at near-zero interest rates to invest in countries with higher rates. These investors may be forced to unwind their positions to avoid losses if the yen suddenly strengthens, as it did on Monday.
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This article Bitcoin Showing Most Asymmetric Risk-To-Reward Since COVID Amid Recent Crash, Bitwise Researcher Says originally appeared on Benzinga.com