Why Grayscale Sees ATHs Before Q3, With ETH Outperforming: Bits + Bips

Despite geopolitical tensions, regulatory delays in Washington, and scrutiny surrounding the Federal Reserve, the crypto markets remain remarkably resilient. Bitcoin and Ethereum appear to be brushing off headlines that would have historically triggered sharp sell-offs, suggesting a decoupling from short-term political noise in favor of deeper macroeconomic drivers.

In a recent discussion, Zach Pandle, Director of Research at Grayscale Investments, provided a comprehensive outlook on why this market strength is likely to persist. From the "debasement trade" driving institutional flows to the untapped potential of advised wealth, Grayscale’s data points toward a sustained bull market that could see major assets hitting significant milestones within the next 18 months.

Key Takeaways

• Projected All-Time Highs: Grayscale anticipates Bitcoin reaching new all-time highs, potentially exceeding $126,000, in the first half of 2026.
• Macro Over Regulation: Approximately 70% of current market movement is driven by macroeconomic factors (debt, currency debasement), while only 30% is attributed to regulatory news.
• Ethereum’s Edge: ETH is positioned to outperform in a clearer regulatory environment due to its dominance in DeFi and stablecoin infrastructure.
• The "Advised Wealth" Catalyst: Less than 0.5% of U.S. advised wealth is currently allocated to crypto, representing a massive source of future capital inflows.
• Fed Independence Concerns: Erosion of Federal Reserve independence historically correlates with higher inflation, strengthening the investment case for scarce assets like Bitcoin.

The 70/30 Split: Macro Forces vs. Regulatory Clarity

While Washington dominates the news cycle—particularly regarding the delayed markup of the market structure bill—Pandle argues that policy is secondary to the macroeconomic reality. According to Grayscale’s research, the primary engine behind the current rally is the demand for alternative stores of value.

Investors are increasingly viewing Bitcoin through the same lens as gold and precious metals. The "debasement trade" is active, fueled by concerns over national debt and currency devaluation. While regulatory clarity in the U.S. is vital for long-term industry health, it is the macro imbalances that are currently moving the needle.

"My view is it's sort of 70/30. 70% the macro dollar debasement trade and 30% the regulatory trade."

This explains why the market has remained buoyant even as legislative progress stalls. Capital is flowing into the ecosystem not necessarily because investors expect immediate laws to pass, but because they are hedging against fiscal instability.

Institutional Flows and the "Advised Wealth" Giant

The launch of Spot ETFs has fundamentally changed market structure, but the composition of buyers is evolving. Early volatility in ETF flows earlier this year was largely attributed to tax-loss harvesting strategies. However, recent data suggests a return to fundamental, long-term accumulation.

The Sleeping Giant

The most significant opportunity for capital inflows lies in "advised wealth"—money managed by RIAs (Registered Investment Advisors) and independent broker-dealers. This segment represents a roughly $40 trillion industry.

Currently, Grayscale estimates that conservatively less than 0.5% of U.S. advised wealth is allocated to the crypto asset class. As these platforms continue to onboard crypto ETFs and model them into diversified portfolios, this percentage is expected to grow to a few percent over the coming years. This shift represents a steady, persistent bid for Bitcoin and Ethereum that differs significantly from the speculative leverage of offshore derivatives markets.

Price Outlook: The Path to 2026

Regarding price targets, Grayscale remains bullish on the medium-term trajectory. The combination of the macro bid and the slow unlocking of institutional capital sets the stage for significant appreciation.

"We think Bitcoin reaches a new all-time high in the first half of 2026. Something above $126,000 by June 30 is a reasonable summary of our expectation."

The "OG" Risk Factor

While the fundamentals are strong, Pandle notes one specific risk factor that investors should monitor: "OG Bitcoiner crash out." On-chain data from late last year revealed significant movement of older coins, suggesting profit-taking by long-term holders. This behavior historically creates resistance levels during bull runs. While much of this selling may have concluded, the behavior of these vintage wallets remains a critical variable for price action in the coming months.

Ethereum vs. Solana: A Nuanced Outlook

The divergence between major Layer 1 blockchains is becoming clearer, with distinct value propositions emerging for Ethereum and Solana.

Why Ethereum Could Outperform

Pandle suggests that Ethereum stands to benefit disproportionately from the passage of market structure legislation. Because Ethereum dominates the decentralized finance (DeFi) sector and stablecoin issuance, regulatory clarity regarding these specific verticals directly impacts its ecosystem more than it does Bitcoin's.

Furthermore, Ethereum captures a portion of the "monetary premium" that Bitcoin enjoys. Due to its issuance mechanics and burn rate, many investors view ETH as a scarce commodity, allowing it to benefit from both the tech-growth narrative and the macro-debasement narrative.

Solana's Lane

Conversely, Solana and emerging high-throughput chains are competing on execution—speed, cost, and efficiency. These platforms are likely to capture high-turnover use cases, such as tokenized equity trading. Grayscale views the smart contract landscape as one where approximately half a dozen chains will eventually capture the lion's share of value, provided they maintain distinct competitive strategies.

Federal Reserve Independence and Inflation

Recent political pressure on the Federal Reserve highlights a critical macroeconomic theme: central bank independence. Pandle defines true independence not just as separation from the White House, but as independence from the nation's debt problem and election cycles.

When a central bank loses this independence, monetary policy tends to become subservient to fiscal needs—specifically, keeping interest rates low to manage government borrowing costs. The historical consequence of this dynamic is structurally higher average inflation.

This erosion of independence serves as a long-term tailwind for crypto. As trust in the sovereign management of fiat currency wavers due to fiscal dominance, the investment case for non-sovereign, hard assets like Bitcoin becomes increasingly compelling to institutional allocators.

Conclusion

The crypto market is maturing. While political headlines regarding the SEC or specific bills still generate noise, the underlying current is being driven by powerful macroeconomic tides and the gradual re-plumbing of the financial system to include digital assets. With the "advised wealth" sector barely exposed and the macro thesis for hard assets strengthening, the path toward 2026 appears to be one of sustained growth, regardless of short-term legislative delays.