Original Author: Jordi Visser

Original Translation: Luffy, Foresight News

On April 8 of this year, amidst the intense panic caused by tariff disputes and "Liberation Day," I published an article titled "The Dawn After the Storm" on Substack. At that time, the S&P 500 index had plummeted by 20%, economists were warning of an impending recession, and the market was shrouded in fear. In the article, I pointed out that the sell-off triggered by market factors would become an excellent buying opportunity due to the development of artificial intelligence; six months later, people would realize that the initial panic was completely unnecessary compared to the rapid advancements in the field of artificial intelligence.

And indeed, that turned out to be the case. The market gradually warmed up, risk assets rebounded strongly, the enthusiasm for artificial intelligence continued to rise, and people began to adapt to the changes in the relevant markets.

By November, Bitcoin entered a consolidation phase, significantly lagging behind the stock market, leaving cryptocurrency investors filled with disappointment. In my article "Bitcoin's Silent IPO," I suggested that Bitcoin's seemingly frustrating consolidation was not a sign of weakness but rather a necessary phase of distributing chips while other assets were rising. Early Bitcoin whales finally had the opportunity to realize liquidity, methodically reducing their Bitcoin holdings thanks to strong institutional buying from exchange-traded funds and corporate treasuries. This was akin to the expiration of a lock-up period in a traditional IPO; although the process was unsettling and slow, it was crucial for the healthy development of the market in the long run.

However, this consolidation phase was eventually broken. As the stock market entered a correction mode, particularly with the AI stocks favored by retail investors leading the decline, Bitcoin's "silent IPO" chip distribution triggered a deeper drop. This volatility caused Bitcoin's year-to-date gains to turn slightly negative. The cognitive dissonance that had previously perplexed the cryptocurrency industry had now evolved into tangible bearish sentiment and skepticism. The optimistic atmosphere of the Liberation Day period felt like a distant memory, and discussions about the impending end of Bitcoin's four-year cycle grew increasingly fervent. Social media was filled with claims that "Bitcoin has lost its upward potential," and even those who insisted that "this time is different" began to concede defeat and exit.

This decline caused the cryptocurrency fear and greed index to drop to 15, matching the lows before and after Liberation Day, as the market seemed to fall into despair. It was for this reason that I wrote this article. Consistent with my previous views surrounding Liberation Day, I firmly believe that the movements of various assets today are driven by the development of artificial intelligence. Moreover, I am convinced that years from now, all investors will awaken to the realization that they missed a significant opportunity, and the asset that best reflects the value of artificial intelligence is Bitcoin.

It is worth mentioning that the Bitcoin white paper was released in 2008, and the Raina-Madhavan-Ng paper in 2009 became a groundbreaking study, confirming that graphics processing units could enhance deep learning efficiency by over 70 times, thus ushering in a new era of machine learning driven by GPUs. Both emerged around the same time, representing breakthrough innovations that complement each other and are indispensable.

Such breakthrough innovations not only reduced the demand for office work but also, to some extent, decreased overall employment positions. At the same time, they exacerbated wealth distribution inequality, forcing governments worldwide to maintain fiscal deficits. The rising prices of financial assets became a form of universal basic income through beat returns. Today's universal basic income is not cash subsidies from the government but rather universal beat returns: the operational rules of the entire system dictate that people's wealth will inevitably grow. For those without assets, government transfer payments constitute another form of universal basic income. This situation has given rise to what people often refer to as a K-shaped economy. Most people face not only job anxiety and wage pressure from reduced corporate hiring but also inflation triggered by government universal basic income policies, with living costs continuously rising and dissatisfaction growing. In this context, Bitcoin stands to benefit. Before artificial intelligence fully permeates the capitalist system and public markets, Bitcoin has always maintained a correlation with risk assets. The combination of stablecoins and AI agents has accelerated the speed of capital circulation and reduced the market's reliance on leverage; asset tokenization has allowed illiquid assets such as real estate, private debt, private equity, and venture capital to be freely traded around the clock, thereby reducing the leverage needed to support the prices of these assets. As artificial intelligence continues to develop, its deflationary effects will gradually become apparent. In 2026, advancements in AI drug development, autonomous taxis, and AI agents will drive corporate profit growth; at the same time, the proliferation of smart technologies will intensify market competition, further impacting the prices of various assets.

An interesting phenomenon in the current market situation is that while people previously worried that Bitcoin could not keep pace with the stock market's rise, its performance has finally returned to a reasonable trajectory. As the stock market corrects, especially with the decline of bubble-like retail AI concept stocks, Bitcoin has also fallen in tandem. The phenomenon that puzzled everyone during the "silent IPO" phase, where Bitcoin's movements diverged from the stock market, no longer exists; Bitcoin has returned to its nature as a risk asset, with its movements closely tied to market growth expectations and liquidity conditions. In my view, this will accumulate enough purchasing power and market momentum to lay the foundation for a new round of upward trends.

This means that looking ahead to the market in 2026, I once again see a glimmer of hope. Just as the panic over tariffs in April created a buying opportunity, the current pullback of Bitcoin alongside overall risk assets is also building momentum for the next significant rise.

Bitcoin's Correlation with the Stock Market Actually Hides Bullish Signals

There has long been a common misconception in the market: Bitcoin should detach from traditional risk assets and develop an independent trend. A mainstream view holds that Bitcoin is akin to digital gold, capable of hedging against risks in the existing financial system and having no correlation with the stock market. Therefore, if Bitcoin falls alongside the stock market, it implies that something is wrong with Bitcoin itself.

But this view is incorrect; Bitcoin is essentially a risk asset.

Indeed, Bitcoin possesses value storage attributes and has decentralized characteristics. However, from the perspective of market sentiment and capital flow, it is a high beta risk asset. Exchange-traded fund investors will include Bitcoin in their portfolios alongside stocks, and when they adjust their portfolios to reduce risk, they will simultaneously sell both Bitcoin and stocks. Retail investors will also use the same funds to invest in both cryptocurrencies and stocks. Even those who invest in Bitcoin out of concern for currency devaluation will increase their buying intensity during periods of favorable economic conditions and ample cash flow.

Thus, when the Nasdaq index declines, Bitcoin will also fall; when AI concept stocks suffer setbacks, Bitcoin will be affected as well. This is not a market flaw but a normal phenomenon. Given the current composition of Bitcoin holders, such movements are reasonable.

Behind this phenomenon lies a bullish signal: since Bitcoin is correlated with risk assets, its future prospects are closely tied to the movements of risk assets. In other words, to predict Bitcoin's future movements, one must first understand the future direction of the stock market.

Next, I will explain why I am confident about the movements of risk assets in 2026.

2026 Market Layout: The Synergistic Efforts of Fiscal, Monetary, and Artificial Intelligence

Market upswings are often accompanied by numerous concerns. Current market worries mainly focus on the AI bubble, the risk of economic recession, and the sluggish state of the cryptocurrency market. However, the outlook for the market layout in 2026 is very promising.

Fiscal support will continue to exert its influence. The infrastructure investment act, the chips and science act, and the inflation reduction act are not mere talk; these multi-trillion-dollar spending plans will effectively stimulate economic activity while also causing fiscal deficits. To win the midterm elections, relevant policies of the "package of favorable measures" have been advanced ahead of schedule. Currently, data centers are being built at an unprecedented pace, semiconductor factories are starting operations, and electrical infrastructure is continuously being upgraded.

The Federal Reserve has ample room to ease monetary policy. Current inflation levels are within a controllable range, and this year, wages, housing prices, and oil prices are all under pressure. Even though tariff adjustments have some impact, considering the weak job market, inflation levels are likely to remain stable. Moreover, artificial intelligence will not only trigger deflationary effects but also impact the job market.

The field of artificial intelligence is set to witness groundbreaking advancements. Over the past year, the pace of AI development has been astonishing, and a series of tangible applications about to emerge will undoubtedly attract widespread attention from mainstream society:

• AI Drug Development: The first batch of drugs developed by AI is nearing clinical trial stages. Positive progress will have a disruptive impact on the healthcare industry and economic productivity. As of now, the pharmaceutical sector's stock prices in November have achieved the best performance for the same period in 30 years. In the future, major pharmaceutical companies will compete to introduce AI technology in their R&D processes, and massive funds will flow into the AI healthcare sector.
• Autonomous Driving: For years, the notion that "autonomous driving technology will be realized within five years" has remained a slogan, but now this field is finally reaching a turning point. The autonomous driving company Waymo is expanding its business scope, Tesla's full self-driving technology continues to optimize, and Chinese companies are launching autonomous taxis on a large scale. By 2026, if autonomous taxis become widespread in major cities, the humanoid robot sector will also spark speculative enthusiasm.
• AI Agents and Productivity: AI agents capable of autonomously handling complex tasks will be widely applied in enterprise software, customer service, and the creative industry, with their impact on productivity being immeasurable, driving profit growth across various industries. AI can help various enterprises enhance efficiency, increase capacity, and improve profitability.

The manufacturing sector is also showing signs of expansion. The construction of AI infrastructure is driving a revival in American manufacturing. After years of contraction, the manufacturing sector is finally showing signs of recovery. I believe that under the influence of the many favorable factors mentioned above, the Purchasing Managers' Index (PMI) will rebound in 2026. Historically, during periods of rising PMI, cryptocurrencies, especially altcoins, often perform exceptionally well.

Bears will shout, "The AI bubble is about to burst." There may indeed be a bubble, but the duration of the bubble and the extent of the rise often exceed everyone's expectations. The internet bubble did not burst when valuations first appeared unreasonable in 1997; it peaked three years later in March 2000. From the end of 1994 to the end of 1999, the Nasdaq 100 index surged by 800%, while in the past five years, the index's increase was less than 100%. Compared to the internet bubble, the current AI sector, even if it has a bubble, is merely in the early to mid-stages. The mainstream population has not fully recognized AI-related investments; even your friends and family are unlikely to inquire about AI concept stocks at Thanksgiving gatherings, and such widespread discussion is often a characteristic of the later stages of a bubble, which will also bring a surge in the cryptocurrency market.

Furthermore, bubbles often require specific triggers to burst, typically when the Federal Reserve forcibly tightens monetary policy during economic weakness. However, the Federal Reserve has already completed its tightening cycle, and in 2026, it may even ease monetary policy rather than restart tightening. Therefore, there are currently no typical catalysts that would trigger a bubble burst.

Positive Catalysts for Bitcoin in 2026

If risk assets experience a strong rally in 2026, Bitcoin, as a high beta risk asset, is likely to significantly outperform the market. In addition, there are several specific positive factors for Bitcoin that will further boost its strong performance:

• Clear Act. For a long time, regulatory uncertainty has constrained the development of the cryptocurrency market. This act is expected to be passed by the end of 2025 or early 2026, at which point a clear regulatory framework will be established, clarifying regulatory responsibilities and eliminating legal ambiguities. Many large asset management companies and pension funds that have previously taken a wait-and-see approach will also gain permission to invest in cryptocurrencies. At that time, the current inflow of funds into exchange-traded funds will seem trivial compared to the massive funds that are about to enter the market.
• The scale of asset tokenization continues to expand. Major financial institutions such as JPMorgan, BlackRock, and Franklin Templeton are advancing the tokenization of government bonds, real estate, commodities, and stocks, and are building dedicated tokenization platforms. This not only confirms the value of cryptocurrency infrastructure but also demonstrates that blockchain technology is not limited to digital assets like Bitcoin. As asset tokenization progresses, previously illiquid assets will achieve round-the-clock trading, and the demand for leverage will decrease, further highlighting Bitcoin's role as a neutral settlement asset, akin to a network transmission protocol in the digital finance sector.
• The development of stablecoins is accelerating. This is a severely underestimated positive factor. The application of stablecoins is rapidly expanding globally, particularly in developing countries. USDT and USDC have gradually become channels for dollar payments in various regions around the world. Whether it is Nigerians receiving USDC instead of naira, Argentine companies holding dollar stablecoins instead of pesos, or cross-border payments being completed through stablecoins rather than relying on intermediary banks, all indicate that cryptocurrency infrastructure has become an indispensable part of global trade.

Stablecoins and Bitcoin are not in competition but rather complement each other. Stablecoins serve as the medium of exchange in the digital economy, while Bitcoin fulfills the function of value storage. As more commercial activities and funds flow into the digital economy, an increasing amount of capital will inevitably flow into Bitcoin. Stablecoins can be viewed as broad money in the digital economy, while asset tokenization serves as a bridge connecting traditional fiat currency assets with the digital economy system. This will create a powerful network effect: the proliferation of stablecoins will attract millions of new users into the cryptocurrency system, and these users, while holding stablecoins, will inevitably need a long-term value storage channel, making Bitcoin the natural choice. The network effect brought about by the development of stablecoins will greatly promote the adoption of Bitcoin, and its influence, though difficult to quantify, cannot be ignored.

Historical Trends May Recur

Decades of market experience tell us that initial lows in the market often face a second test. This occurred in April of this year when the market rebounded from a bottom, only to retest previous lows before embarking on a significant upward trend. This market pattern is entirely normal and beneficial, as it can solidify market support levels and force indecisive investors to exit.

I expect Bitcoin may also follow this trend. The market has likely already established a preliminary low, but a second retest may occur in the coming weeks. At that time, the most indecisive investors may concentrate their selling, triggering another round of declines, and there may even be a brief panic sell-off, causing Bitcoin prices to drop further.

If this retest occurs as expected, it will be an excellent buying opportunity for the year. Because during the retest process, those savvy investors who missed the initial low buying opportunity will gain a second chance to position themselves. Moreover, a retest characterized by shrinking trading volume and reduced panic will also validate the stability of the previous low. However, I do not recommend that investors deliberately wait for the retest. Currently, both Bitcoin and the stock market are in a phase of spreading fear and low greed, making it a good time to seize the opportunity to position oneself.

This year, Bitcoin's performance has been under pressure; although the chip distribution process during the "silent IPO" phase has not completely ended, significant progress has been made. Currently, Bitcoin's holding structure is more dispersed than ever, with retail investors generally bearish and choosing to wait and see, while exchange-traded fund investors are patiently accumulating, and those concerned about currency devaluation are steadily increasing their holdings. Developing countries are also gradually incorporating Bitcoin into their financial infrastructure systems.

At the same time, the market environment in 2026 is extremely favorable. Fiscal policies continue to exert influence, monetary policies provide supportive benefits, breakthroughs in the field of artificial intelligence will drive market speculation and corporate profit growth, manufacturing is gradually expanding, the Clear Act will eliminate regulatory doubts, the scale of asset tokenization is continuously increasing, and the development of stablecoins will also create a powerful network effect.

Bitcoin is closely linked to risk assets, and risk assets are expected to perform strongly in 2026, which will naturally strengthen Bitcoin as well.

The Light of Hope Has Never Died

I often think back to the market conditions during Liberation Day. At that time, the S&P 500 index plummeted by 20%, economists were warning of a recession, and investors were panic-selling their assets. I suggested that in six months, people would realize that the initial panic was unfounded, and the facts have confirmed my judgment.

Now, I hold the same view regarding Bitcoin. This pullback is certainly painful, and market sentiment has hit rock bottom, with the cryptocurrency fear and greed index dropping to 15, matching the lows during Liberation Day. However, pullbacks in a bull market often make people feel that the market is in dire straits, leading to the illusion that "this time is different," and causing people to mistakenly believe that the upward trend has completely ended.

But for those investors who can set aside their panic, these pullback moments are always excellent buying opportunities.

Throughout my trading career, I have experienced numerous crises, from the 1994 Mexican financial crisis and the 1998 Brazilian financial turmoil to the global financial crisis, the market turbulence caused by the COVID-19 pandemic, and the recent market fluctuations related to Liberation Day. These experiences have taught me that no matter how severe the current situation appears, the reality is often not as dire. One unchanging truth is that as long as one can overcome fear, these special periods are filled with excellent investment opportunities.

Bitcoin is not in distress, and crypto assets will not fade away. The current market volatility is merely a normal manifestation of a mature risk asset—it is still recovering from the market winter of 2022, synchronously pulling back with other risk assets during this phase of uncertainty and position adjustment. Compared to the market fluctuations in April, this pullback is more concentrated, primarily affecting growth stocks and cryptocurrencies, rather than triggering widespread market panic. This situation is healthier, indicating that the market is undergoing differentiated adjustments, and subsequent rebound trends may be more rapid and targeted.

For discerning investors, now is a good time to position themselves. Of course, investment should be rational and restrained; one should not blindly increase leverage or invest beyond their capacity. Instead, one should calmly analyze the market fundamentals and firmly believe in their positioning.

In the context of artificial intelligence driving excess returns on investments, the market is bound to experience volatility. Governments around the world face numerous challenges in responding to this disruptive technology, and the market will inevitably experience moments of panic and skepticism, with headlines about market crashes and bear markets likely to proliferate. However, investors should ignore these distractions and focus on market fundamentals. As one of the most influential innovations in human history, artificial intelligence will undoubtedly create a better development outlook for us in the future.

When everyone sees the light of hope, it will be too late to position themselves. Currently, the cryptocurrency fear and greed index is only at 15, with investors conceding defeat and exiting, and the market is in a sluggish phase, which is precisely the investment opportunity in the cryptocurrency market.

In six months, just as the market sentiment surrounding Liberation Day changed dramatically after the fluctuations, the market sentiment for Bitcoin will undergo a complete transformation. At that time, looking back at today's prices and market sentiment, people will surely wonder why they had doubts in the first place.

The light of hope is right there; you just need to be willing to discover it.

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