Bitwise says Bitcoin’s recent pullback may be short-lived — and that a far bigger macro risk could ultimately work in crypto’s favor: roughly $30 trillion of global debt coming up for refinancing in 2026.
In a new report, the asset manager warns rising Japanese government bond yields and an IMF caution about fading demand for sovereign debt could squeeze markets. If central banks respond by injecting fresh liquidity, Bitwise argues, that dynamic could bolster Bitcoin’s appeal. The firm positions Bitcoin as an asset outside government balance sheets and free of a central issuer — a characteristic that could matter when sovereign borrowing becomes harder to manage.
Bitwise also ties Bitcoin’s performance to real interest rates. Historically, the asset has tended to do better when real yields fall. The firm suggests a combination of sticky inflation and a Federal Reserve pause could lower real rates and create a more supportive backdrop for Bitcoin.
The report walks through May’s price action: Bitcoin’s rally earlier in the month surged briefly above $83,000 before cooling off toward the $70,000 area as exchange-traded product (ETP) outflows picked up and sentiment weakened. A recovery above $80,000 stalled at the $80k–$85k “bull-bear” threshold and then slid to about $72,000 — a month defined by ETP outflows, sovereign bond stress, and record-length hodling.
What helped the move higher initially? Bitwise points to a short squeeze, stronger on-chain signals, roughly $166.5 million in net inflows into Bitcoin ETPs, and long-term holders adding about 125,000 BTC in the prior month. That support evaporated quickly: global Bitcoin ETPs subsequently saw more than $1 billion in net outflows, which the firm says knocked market confidence as Bitcoin failed to clear the $80k–$85k dividing line.
Supply-side dynamics add another twist. Long-term investors now hold a record 14.85 million BTC — about 73% of the circulating supply. Bitwise highlights growing inactivity on the chain: 60% of Bitcoin hasn’t moved in over a year, 48.5% for more than two years, 42.8% for more than three years, and 33% for at least five years. That concentration of dormant coins is tightening available supply while buyers remain cautious.
On valuation, Bitwise notes Bitcoin’s MVRV ratio sits below its long-run average, while major US tech stocks look rich — the Nasdaq 100’s price-to-book is near record highs. The firm lays out key technical levels to watch:
- Key area to watch: $78,000–$80,000
- First major ceiling: $83,000–$85,000
- Important support: $73,000
- Next upside target: $95,000
At the time of Bitwise’s note, CoinGecko data showed Bitcoin trading around $69,460, down about 4.7% over the past 24 hours.
Sources: Bitwise report, CoinGecko.
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