Multiple overlapping challenges are currently affecting the crypto market, impacting bitcoin's value, according to Greg Cipolaro, NYDIG's head of research.
By Krisztian Sandor|Edited by Nikhilesh De Jun 7, 2026, 4:00 p.m. 3 min readMake preferred onKey Points:
- Bitcoin's decline is attributed to various converging challenges rather than a single factor, as noted by NYDIG's Greg Cipolaro.
- Factors include momentum in AI, significant tech IPOs, concerns about quantum computing, sanctions on Iranian crypto exchanges, and the sale of Bitcoin by Strategy.
- Onchain indicators suggest a potential bottom is approaching, but the current decline is considered modest compared to prior bear markets.
Bitcoin BTC$62,087.59 dropped below the $60,000 mark, reaching a new cycle low, prompting investors to look for reasons behind this trend. According to Greg Cipolaro, head of research at NYDIG, there is likely no single explanation for this decline.
In a recent report, he stated that bitcoin and the overall crypto market are facing multiple overlapping challenges that are negatively impacting prices.
At the forefront is the AI sector, which is drawing investment away from bitcoin, as it has become the leading growth area in the market.
Cipolaro pointed out that the intersection of AI and crypto investors is larger than many might think. Both sectors attract investors looking for exposure to innovative technologies and high returns. As stocks related to AI continue to perform well, capital has shifted from crypto to AI, he noted.
Furthermore, investors are bracing for what could be one of the largest waves of tech IPOs in years. Companies like SpaceX, OpenAI, and Anthropic are expected to go public soon, with SpaceX already well into the IPO process. Such large IPOs often lead institutions to liquidate existing positions to raise cash for new investments, which could create additional pressure on crypto demand, Cipolaro explained.
The crypto industry is also facing unique challenges.
U.S. Treasury Secretary Scott Bessent's announcement that authorities seized approximately $1 billion in crypto assets linked to Iran has raised concerns about government intervention in digital asset markets. While details remain scarce, this incident has caused some investors to question a fundamental premise of crypto, Cipolaro stated.
Concerns about quantum computing have also resurfaced following new research suggesting that the resources needed to compromise widely used cryptographic systems may be diminishing more rapidly than anticipated.
Additionally, there is the matter of Strategy (MSTR) selling Bitcoin.
The sale of 32 BTC, valued at $2.5 million at the time, may not significantly impact supply but has a notable psychological effect. Strategy has been one of the market's most stable buyers over the years, Cipolaro mentioned. Any indication that it might start selling raises concerns for investors, forcing them to reevaluate a key component of the bullish narrative.
Collectively, these factors may shed light on bitcoin's struggles, despite the lack of any significant decline in core network activity or adoption trends.
"Individually, none of these developments seems sufficient to cause a major price correction in bitcoin," Cipolaro observed. "However, when considered together, they provide insight into the recent weakening price action, even in the absence of evident deterioration in adoption metrics."
Is Bitcoin Approaching a Bottom?
Cipolaro's analysis of onchain data presents a nuanced picture.
Several indicators are nearing levels historically associated with significant market bottoms, he pointed out. The MVRV ratio for bitcoin has decreased to 1.2, which is close to the point where market value aligns with the average cost basis for investors. Additionally, the percentage of bitcoin supply in profit has recently dipped below 50%, a sign often linked to capitulation.
However, the overall decline remains relatively mild compared to historical trends.
Bitcoin has experienced a drop of approximately 53% from its peak ($126,000 in October), which is significantly less severe than the 75%-90% declines seen in previous cycles, he noted.
Moreover, there is a timing aspect to consider: the last three bitcoin bear markets lasted about a year from peak to trough, except for the initial bear market in 2011 that ended in 163 days.
The recent plunge below $60,000 occurred only 242 days after the peak.
Bitcoin market cycles (NYDIG)This suggests either that institutional adoption has fundamentally altered the behavior of bitcoin's cycles or that the market has yet to experience a true capitulation phase.
"The onchain data indicates that the market has undergone a significant reset," Cipolaro remarked.
However, the question of whether the low has already been established "likely hinges on whether institutional demand has fundamentally changed the cycle or if it has merely postponed a deeper reset," he concluded.Bitcoin News
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Bitcoin, ether eye worst weekly rout since FTX collapse as cryptos shed $390 billion
By Krisztian Sandor|Edited by Nikhilesh De20 hours agoA week that began with Strategy's bitcoin sale culminated in one of the most significant drawdowns in the crypto market in recent years.
What to know:
- In a challenging week for crypto, bitcoin and ether are set for their largest weekly losses since the FTX collapse in November 2022.
- The crypto market has lost approximately $390 billion in value, with nearly $7 billion in leveraged positions liquidated.
- Significant ETF outflows, Strategy's bitcoin sale, and other factors have contributed to the downturn.