Bitcoin's 30% Correction Seen as Reset, Not Weakness, VanEck Says
2min read Bitcoin’s recent 30% correction has caused a stir in the market, but VanEck’s latest outlook report suggests that this pullback is part of a broader reset rather than an indication of structural weakness. The report highlights that while speculative demand has decreased, institutional adoption continues to grow, and regulatory changes could further solidify Bitcoin’s role in global finance.
VanEck noted that the current negative sentiment is unusual, as the correction aligns with previous bull cycles and is likely driven by the poor performance of altcoins, many of which have returned to their bear market lows. Investors are now awaiting the next catalyst to determine if the market will regain momentum, a sentiment reminiscent of the months leading up to the launch of spot Bitcoin ETFs.
The downturn, which saw Bitcoin fall from a January peak to a low on March 11, coincided with its longest ETF outflow streak since inception. Over the past five weeks, Bitcoin ETFs saw significant outflows, reflecting a pullback in risk appetite amid economic uncertainty. However, VanEck emphasized that even as hedge funds unwind leveraged trades, corporations are integrating Bitcoin into their balance sheets at an accelerating pace. Institutional Bitcoin strategies continue to grow despite the shaky market sentiment.
Ask Aime: What factors are driving the 30% correction in Bitcoin's value, and how might this affect its long-term prospects?
The report highlighted that Strategy, formerly known as microstrategy, continued expanding its Bitcoin treasury strategy, acquiring a significant amount of BTC and launching a convertible note. Other firms, including Metaplanet and semler scientific, are also scaling their Bitcoin-backed financial strategies. Additionally, the introduction of the REX Shares Bitcoin Convertible Bond ETF indicates rising demand for structured investment products tied to Bitcoin treasuries.
On the regulatory front, Bitcoin’s macroeconomic narrative continues to strengthen both in the US and abroad as governments become more open to Bitcoin and digital assets. The Trump administration’s decision to establish a Strategic Bitcoin Reserve signals a major shift in how the US government views Bitcoin, treating it as a strategic asset. Senator Cynthia Lummis has also introduced legislation to formalize a national Bitcoin reserve strategy, reinforcing the idea that Bitcoin is gaining recognition as a government-held financial asset.
Internationally, Bitcoin’s role in trade and finance is expanding. Russia has begun settling oil transactions with China and India in Bitcoin, a move aimed at bypassing Western sanctions. In Latin America and Europe, regulatory clarity is fostering deeper institutional engagement, with coinbase securing a license in Argentina and Deutsche Börse launching Bitcoin custody and settlement services for institutional clients.
VanEck believes that Bitcoin’s latest correction signals a cooling of speculative enthusiasm, but its long-term fundamentals remain intact. Institutional strategies are maturing, policy shifts are creating new use cases, and Bitcoin’s role in global finance is expanding. The market now awaits its next catalyst, whether from monetary policy shifts, corporate treasury moves, or geopolitical developments, to determine the direction of the next phase in Bitcoin’s cycle.
