Bitcoin's recent slide is a pullback inside an early bull market rather than the start of a new downtrend, according to Muneeb Ali, co-founder of the Bitcoin layer-2 network Stacks. In an interview, Ali said the bottom for the largest cryptocurrency is probably already behind the market, and he pushed back on the idea that the recent weakness signals a fresh bear phase.
"I think the bottom for Bitcoin is behind us," Ali said. "We've come out of the bear market and are currently experiencing a pullback in the early stages of a bull market. When bull markets start, people aren't always sure if it's really begun. It's quite normal to see pullbacks during these periods."
Ali's argument rests on how Bitcoin has absorbed a stream of negative headlines. He said the price reaction to bad news has been steadily weakening, which he reads as evidence that much of the selling pressure has already been worked off. Investors who wanted out have largely closed their positions, so each new negative development moves the price less than it once did. He called that limited decline a strong market signal.
That view is a personal market assessment rather than a confirmed turn in the cycle, and it does not by itself establish that a new rally has begun.
The Gold Gap
A central plank of Ali's case is Bitcoin's valuation relative to gold. Ali, who said he has worked in the Bitcoin ecosystem since 2013, expected BTC's market capitalization to have reached 20% to 30% of gold's total value by now. Instead, the ratio remains below 10%.
Note: Figures are Ali's estimates as described in the interview.
He said that shortfall leaves substantial room for growth. Part of the explanation, in his view, lies in how large financial institutions treat the asset. Rather than holding Bitcoin as a store of value comparable to gold or real estate, many institutions classify it as a risk investment closer to technology stocks. When risk appetite in the tech sector fades, those institutions cut their Bitcoin positions too, which helps explain why BTC has at times traded in step with risk assets such as the Nasdaq rather than with gold.
Two Risks on the Horizon
Ali remains constructive on the long-term outlook but flagged two technological threats that he said should not be discounted: quantum computing and AI-driven cyberattacks. The Bitcoin network, he argued, needs to move faster on both while preserving its decentralized structure, which means tightening up how software development and upgrade processes are coordinated.
The next two years should show whether Bitcoin can produce a workable defense against the quantum threat and how it responds to security risks tied to artificial intelligence. Ali said those uncertainties are weighing on Bitcoin's valuation, and that clearing them could open the door to a much stronger advance.
Yield as a Demand Driver
Beyond price, Ali is betting that Bitcoin's transition from a passive store of value into an income-producing asset will support demand. If holders can earn returns denominated in BTC without selling their coins, or borrow against Bitcoin as collateral, that creates new uses for the asset. Products built in the Stacks ecosystem are an example: Ali said institutional investors joined a recently launched program with a total of 1,000 BTC, and that the current program offers a 3% yield.
He does not think Bitcoin's traditional four-year cycle has disappeared entirely, but he said the size of both rallies and drawdowns has shrunk compared with earlier cycles.
What It Means for the Market
The comments land at a moment when crypto investors are weighing whether the recent decline is a buying opportunity or a warning. Ali's thesis implies that sell-side pressure is thinning and that the risk-reward for holders has improved, though his views are those of a builder with a stake in Bitcoin's ecosystem, and the network's unresolved security questions give the cautious camp plenty to work with. For institutional allocators, the key question may be less about the bottom than about classification: as long as Bitcoin trades like a tech proxy, its fortunes will remain tied to swings in broader risk appetite.
