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Bitcoin Over the Next 3 Years Outlook Scenarios and Smart Positioning (2026 – 2028)

Medium· 2025-09-21 04:44

Core Thesis - Over the next three years, Bitcoin's trajectory will be influenced by a balance between engineered scarcity and evolving access, with institutional adoption and blockspace economy growth on one side, and liquidity cycles and human behavior on the other [1][2] Market Structure - Bitcoin's market consists of three layers: spot (actual coins), derivatives (futures and options), and access products (ETFs and funds), with price discovery affected by stress on any layer [5] - The marginal price is influenced by retail, institutions, and miners, with institutions playing a significant role during larger market movements [6] Supply Mechanics - Bitcoin has a fixed supply with diminishing issuance, leading to increased scarcity as the 2028 halving approaches, which will shift the focus from miner subsidies to transaction fees [7][8] - The economics of miners will change post-halving, resulting in fewer forced sellers and a generally downward structural sell flow [8] Demand Drivers - Institutional adoption is expected to grow through mandates and custody solutions, creating a structural bid for Bitcoin [10] - Global retail adoption is driven by inflation hedging and capital mobility, particularly in economies with unstable currencies [11] - Bitcoin's role as neutral collateral in crypto finance enhances its demand beyond just a store of value [12] Technological Catalysts - Scaling solutions like Lightning Network and new payment rails will enhance Bitcoin's usability for everyday transactions [14] - Innovations in data inscriptions and token standards are transforming blockspace into a marketplace for various transactions [15] Macro Context - Bitcoin acts as a high-beta liquidity barometer, with its price movements closely tied to real rates and liquidity cycles [16] - Potential regime shifts in monetary policy could favor Bitcoin's scarcity narrative, unlocking new buyer cohorts [17] Regulatory Environment - Improved access products and market infrastructure will facilitate mainstream adoption, while compliance measures will create a clearer regulatory framework [19] - Jurisdictional differences in regulations will impact custody options and market dynamics [20] Scenario Planning - Three potential scenarios for Bitcoin's future: - Bear case: scarcity meets tight liquidity, leading to prolonged price weakness [25] - Base case: gradual adoption and price range expansion [26] - Bull case: structural demand combined with favorable macro conditions [27] Portfolio Construction - A core-satellite investment strategy is recommended, with a focus on disciplined rebalancing and predefined profit-taking strategies [29] - Dollar-cost averaging (DCA) is suggested for managing entry points and emotional biases [29] Practical Operations - Emphasis on self-custody practices and exchange hygiene to mitigate operational risks [31] - Importance of maintaining clear records for tax and cost basis management [32]