Bitcoin’s downward trend could persist longer than expected, according to some analysts who see similarities with the 2022 bear market.
Quinn Thompson, head of the crypto hedge fund Lekker Capital, believes the decline won’t be sudden but rather a gradual slide that might take Bitcoin below $60,000 by the end of the year. Unlike previous sharp crashes, Thompson expects a slow grind that could test investors’ resilience.
Thompson’s outlook remains pessimistic, even as some market voices have been more optimistic recently. He dismisses the hype surrounding crypto initiatives from the Trump administration, such as the U.S. Sovereign Wealth Fund and the Strategic Bitcoin Reserve, as nothing more than fleeting news without real impact. He also downplays MicroStrategy’s continued Bitcoin acquisitions, seeing them as an outlier rather than a sign of strong market demand.
The root of his caution lies in the current economic environment shaped by recent policy moves. One major factor is the government’s push to reduce spending, spearheaded by the Department of Government Productivity (DOGE) under Elon Musk. With plans to cut the federal budget by up to $1 trillion, Thompson believes this could slow economic growth and dampen consumer confidence, even if the final cuts are less severe than planned.
Another aspect that worries Thompson is the potential impact of stricter immigration policies, which he thinks could lead to labor shortages and increased wage pressure. He points out that when the labor market tightens, businesses may struggle to maintain profitability, which could ripple through the economy and affect investment sentiment.
Uncertainty around tariffs also remains a sticking point. The administration’s inconsistent stance on trade has left businesses hesitant to invest, as they can’t predict future costs with confidence. This kind of unpredictability makes it difficult for companies to plan ahead, leading to a cautious approach in both hiring and expansion.
Monetary policy is another factor in Thompson’s bearish view. Despite the Fed’s recent rate cut, he expects further reductions to be cautious and spaced out, as the central bank remains focused on inflation control. The coordination between the Fed, Treasury Secretary Bessent, and President Trump signals a careful approach that might not offer the quick relief markets are hoping for.
Thompson sees these combined economic pressures as a significant challenge for Bitcoin and other risky assets. He also notes that the administration seems more focused on maintaining fiscal discipline than on avoiding a recession, suggesting that the current strategy might not change unless economic conditions worsen dramatically.
With midterm elections looming in 2026, Thompson doesn’t rule out potential policy shifts if the economic pain becomes too politically costly. However, he remains skeptical that meaningful changes will happen soon, leaving Bitcoin vulnerable to continued downward pressure.
