Key Highlights
- Muneeb Ali says Bitcoin may have already passed its market bottom and could be in an early bull-market pullback.
- Bitcoin’s limited reaction to negative news may indicate that selling pressure is weakening, while its valuation remains below Ali’s comparison with gold.
- Quantum computing, AI-powered cyber threats and Bitcoin’s ability to generate yield could shape the cryptocurrency’s next major market phase.
Muneeb Ali Says Bitcoin May Have Left Its Market Bottom Behind
Muneeb Ali, co-founder of Stacks, believes Bitcoin may have already moved beyond its market bottom and entered the early stages of a new bull market. Ali said investors often remain uncertain at the beginning of a bull cycle, making pullbacks a normal feature of the market rather than definitive evidence that the broader recovery has ended.
“I think the bottom for Bitcoin is behind us. 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.”
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Ali also pointed to Bitcoin’s weakening response to negative market news. Although the number of adverse developments has increased, he said Bitcoin’s price has been declining less sharply in response. In his view, this may indicate that many investors who intended to sell have already closed their positions, reducing the market’s remaining selling pressure.
Why Has Bitcoin Lagged Behind Gold?
Ali evaluates Bitcoin’s long-term valuation by comparing its market capitalization with the total value of gold. He said he has been involved in the Bitcoin ecosystem since 2013 and previously expected Bitcoin’s market capitalization to reach between 20% and 30% of gold’s market capitalization by now. Instead, Bitcoin remains below 10% of that level, according to Ali.
Ali views the gap as evidence that Bitcoin still has substantial long-term growth potential. However, he said institutional investors have contributed to Bitcoin’s weaker performance by treating $BTC as a risk asset similar to technology stocks rather than as a store of value comparable to gold or real estate.
As a result, Ali said institutions may sell Bitcoin when risk appetite declines across the technology sector. This behavior causes $BTC to move more closely with riskier assets such as the Nasdaq than with gold, limiting Bitcoin’s ability to perform as an independent store-of-value asset during periods of market stress.
Why the Next Two Years Could Be Critical for Bitcoin
Despite his positive long-term outlook, Ali identified quantum computing and AI-powered cyber threats as two major risks for the Bitcoin sector. He argued that the Bitcoin network must respond more quickly to these challenges while preserving its decentralized structure.
Ali said software development and update processes may need to become more organized to improve the network’s ability to address emerging security threats. He expects the next two years to provide greater clarity on whether Bitcoin can develop a viable response to quantum computing and how effectively it can manage risks associated with artificial intelligence.
According to Ali, these unresolved issues are weighing on Bitcoin’s valuation. He believes that successfully addressing them could give $BTC the foundation for a significantly stronger upward trend.
What Could Drive Bitcoin’s Next Rally?
Ali said Bitcoin’s transformation from a passive store of value into an income-generating asset could have a meaningful effect on demand and price performance. He argued that Bitcoin holders should be able to earn returns in $BTC without selling their holdings or borrow against Bitcoin as collateral.
Wider adoption of these use cases could increase demand for Bitcoin, Ali said. He also referred to yield products developed for Bitcoin holders through the Stacks ecosystem. According to Ali, institutional investors recently participated in a program involving a total of 1,000 $BTC, with the current program offering a 3% yield rate.
Ali nevertheless believes Bitcoin’s traditional four-year market cycle remains relevant, although the size of its price increases and declines has decreased compared with previous cycles.
This is not investment advice.
Why This Matters
Bitcoin’s future performance may depend on more than market sentiment and institutional flows. Ali’s assessment highlights three factors that could influence the next stage of the market: whether Bitcoin continues to reduce its correlation with technology stocks, whether the network can respond to quantum and AI-related security risks, and whether Bitcoin-based financial products can create new sources of demand.
The next two years could therefore be important for determining how investors value Bitcoin. A stronger security framework and broader use of Bitcoin as collateral or a yield-generating asset could support a new rally, while unresolved technological risks and continued risk-asset behavior could keep pressure on its valuation.
Frequently Asked Questions
Does Muneeb Ali believe Bitcoin has entered a bull market?
Yes. Muneeb Ali said Bitcoin may have already passed its bottom and that the market could be experiencing a pullback during the early stages of a bull market.
Why does Ali compare Bitcoin with gold?
Ali compares Bitcoin’s valuation with gold’s total market capitalization. He said Bitcoin remains below 10% of gold’s market capitalization, compared with his earlier expectation that it would reach between 20% and 30%.
What risks could affect Bitcoin over the next two years?
Ali identified quantum computing and AI-powered cyber threats as major risks. He said the coming two years could show whether Bitcoin can develop effective responses while maintaining its decentralized structure.
