As Bitcoin holds a price of $92,783.58, it embodies a complex interplay of macroeconomic trends and market dynamics as the cryptocurrency ecosystem approaches 2026. Jim Ferraioli, director of crypto research and strategy at the Schwab Center for Financial Research, identifies both long-term and short-term factors influencing BTC. He outlines three enduring forces: the global M2 money supply, Bitcoin’s disinflationary supply growth, and its overall adoption rate. In contrast, seven short-term drivers are shaping Bitcoin’s market performance, encompassing market risk sentiment, interest rates, the strength of the U.S. dollar, seasonal trends, excess liquidity from central banks, the availability of large Bitcoin wallets, and potential financial contagions.
As the new year unfolds, several short-term factors appear to align favorably for Bitcoin. Ferraioli points out that credit spreads are currently tight, and many speculative derivative positions, which contributed to a significant market selloff in late 2025, have been largely eliminated. He suggests that a “risk-on environment in equities” should further support crypto, which he refers to as “the ultimate risk asset.”
In terms of monetary policy, favorable conditions could emerge, as Ferraioli anticipates a continued decline in interest rates and the U.S. dollar. With quantitative tightening coming to an end and balance sheet expansion underway, the liquidity landscape seems promising for crypto assets.
However, potential challenges loom on the horizon. Adoption rates for Bitcoin might stagnate in the first half of the year, especially following the volatility experienced in late 2025. Ferraioli notes a possible rebound in adoption rates if regulatory clarity improves, citing the potential benefits of the proposed Clarity Act, which could encourage institutional investors to engage more significantly with Bitcoin.
Another critical point is the halving cycle, which has historically indicated that the third year tends to be a down year for Bitcoin. Given that many crypto investors closely monitor these cycles, this could exert downward pressure on prices.
Historically, Bitcoin has demonstrated an annual gain of approximately 70% from its yearly lows since 2017. While positive trends are anticipated for 2026, Ferraioli indicates that returns may not meet the historical average.
Lastly, an interesting development in Bitcoin’s market behavior is emerging. Ferraioli points out a potential shift in how Bitcoin correlates with traditional assets, suggesting a decrease in correlation with broader equity indexes. Nevertheless, Bitcoin remains closely tied to larger AI stocks, indicating an evolving relationship with macroeconomic factors as the cryptocurrency continues to carve out its niche in the financial landscape.
