Constrained global liquidity and a recent Federal Reserve rate cut that failed to ignite risk assets are forcing a reassessment of institutional cryptocurrency strategies. In a new market report, 10x Research founder Markus Thielen warned financial advisors to abandon standard dollar-cost averaging for Bitcoin, citing historical vulnerabilities to deep drawdowns exceeding 70 percent.
Thielen outlined a cycle-aware trading approach utilizing momentum, trend, and on-chain cost-basis signals. The firm maintains an achievable near-term target of $88,000 for Bitcoin based on spot demand and steady exchange-traded fund inflows, operating within a broader $2.69 trillion cryptocurrency market capitalization.
The report details backtesting of this rules-based strategy, which generated an improved Sharpe ratio of 1.22 compared to 0.82 for standard buy-and-hold allocations, while capping maximum drawdowns at negative 44 percent instead of negative 80 percent. Within the same industry consultation, Verde Capital Management executive Eric Tomaszewski argued that Ethereum is positioned to function as a digital reserve asset used heavily as collateral, even as emerging Layer-2 networks absorb direct transaction fees on the mainnet.
How Macro Liquidity and Election Cycles Replaced the Halving
Broadening the analysis, 10x Research asserted that the traditional four-year Bitcoin cycle remains functional, but its primary drivers have fundamentally changed. Rather than relying on the mechanical block subsidy reduction known as the halving, market movements are now heavily dictated by central bank liquidity and political timing. Thielen noted that historical Bitcoin cycle peaks in 2013, 2017, and 2021 aligned more closely with fourth-quarter election cycles and political uncertainty than with the exact timing of network halvings.
This structural shift is gaining consensus among industry figures. BitMEX co-founder Arthur Hayes publicly corroborated the thesis, stating that global liquidity and credit conditions have consistently been the primary drivers of major rallies rather than an automatic four-year software clock. Institutional capital flows into the digital asset sector remain constrained by these tighter macroeconomic conditions and mixed monetary policy signals.