Why Is Bitcoin Trading Sideways? SkyBridge Founder Explains Three Reasons and the $100,000 Outlook

Recently, crypto market volatility has dropped significantly, with Bitcoin trading in a narrow range. Anthony Scaramucci, founder and managing partner of SkyBridge Capital, noted that Bitcoin has been in its tightest five-year trading range for nine consecutive weeks, with prices roughly flat compared to when the war broke out in February. He attributes this sideways action to a combination of hash rate migration, capital flows, and the four-year cycle phase.

#1. Three Main Reasons Behind Bitcoin's Sideways Price Action

Miners shifting hash rate to AI: A large number of Bitcoin miners are redirecting computing resources to artificial intelligence, disrupting the network hash rate and thus reducing price volatility.
Capital outflows to AI: Beyond Bitcoin, funds from other crypto assets are also flowing broadly into AI-related fields, reducing trading activity in the crypto market.
Tail end of the bear market in the four-year cycle: Many crypto investors believe in Bitcoin's four-year halving cycle. With roughly 18 to 19 months until the next halving, Bitcoin is in the late stage of a typical bear market, where prices tend to be muted.

#2. Bullish Case Ahead: Halving and Tightening Supply-Demand

Despite the lackluster short-term performance, Scaramucci remains firmly bullish on Bitcoin's long-term trajectory. He says that as the next halving arrives, Bitcoin's new supply will be cut in half again, tightening the supply-demand balance and pushing prices higher. He expects Bitcoin to reclaim the $100,000 level. However, he cautions that this process may take some time and the market will not rebound immediately.

#3. Potential Catalyst: The CLARITY Act and Banking Integration

On the regulatory catalyst front, Scaramucci mentioned the CLARITY Act currently under consideration in the U.S. Congress. If passed, the bill would allow banks to participate more broadly in crypto asset custody and related services, changing how American investors hold Bitcoin and reducing regulatory whiplash from alternations in party control. He puts the probability of passage at around 50%, possibly landing in September, but says its short-term price impact is limited, with more of a long-term benefit. He specifically notes that if the bill passes, large banks, regional banks, and community banks will all enter the space, and crypto companies will also have incentives to apply for bank charters, driving the industry's integration with traditional finance.

#4. Risk Discussion: Quantum Computing and Bear Market Depth

Addressing market concerns that quantum computing could threaten Bitcoin's cryptographic algorithms, Scaramucci believes core developers are capable of handling the issue through technical upgrades and does not see it as an overall risk. He acknowledges that retail investors may be unsettled by this, but institutional research is more advanced. Furthermore, he points out that while Bitcoin is currently in a bear market, the drawdown is only about 55%, far less than the 75% to 80% declines seen in previous bear markets. In his view, this suggests there are many net buyers in the market, building strength for the next bull run.

#5. World Liberty Financial's Bank Charter: Limited Impact

Regarding the news that World Liberty Financial, affiliated with the Trump family, has received a conditional bank charter, Scaramucci believes this will have little impact on the overall crypto market. He does not advocate restricting presidential family members from engaging in business activities, but stresses that given their unique position, potential conflicts of interest must be strictly scrutinized.