Bitcoin (CRYPTO: BTC) may have fallen nearly 50% from its all-time high, but its long-term investment thesis remains intact, according to industry expert Alex Blume. In an interview with Schwab Network on June 30, Blume, founder and CEO of institutional digital asset manager Two Prime, attributed the decline from roughly $127,000 to below $60,000 to a difficult period for the cryptocurrency rather than a change in its underlying fundamentals.

Blume pointed to Strategy (NASDAQ: MSTR) as a major factor weighing on sentiment, arguing that the company's aggressive financial engineering to accumulate Bitcoin has reached its limits. He noted that Strategy's preferred equity products have come under pressure, leaving the company focused on strengthening its U.S. dollar reserves rather than buying additional BTC. "The question now is who is buying Bitcoin if the largest buyer is effectively sidelined," he said.

Momentum-driven investors have largely rotated into sectors such as artificial intelligence and robotics, while long-term BTC holders continue to provide a floor for prices. Over the past month, BTC prices have dropped around 19%, falling below $59,000.

Key Catalysts for Revival

Blume identified three potential catalysts that could revive Bitcoin:

• Positive price momentum: A return of positive price momentum would attract traders back into the market.
• Four-year cycle: Renewed confidence in Bitcoin's widely followed four-year cycle could become a self-reinforcing narrative if prices begin rising again.
• CLARITY Act: The potential passage of the CLARITY Act would establish clearer regulatory boundaries between the Securities and Exchange Commission and the Commodity Futures Trading Commission while providing guidance for stablecoins and other digital assets.

Beyond Bitcoin, Blume said blockchain adoption is accelerating across traditional finance, with banks embracing stablecoins and major exchanges exploring tokenized equities.

Anthony Pompliano, CEO of Professional Capital Management, stated on Tuesday that Bitcoin's ongoing slump represents volatility that will eventually catalyze strong returns once the price rises. During an interview with CNBC, Pompliano argued that volatility is not inherently bad and that the best investors actively pursue volatile assets. He highlighted that AI-related investments are currently delivering upside volatility, while Bitcoin is offering downside volatility.

"As we go over the next couple of years, both these assets are going to be very volatile, and that’s ultimately where returns are going to be," the Bitcoin bull said. Pompliano reiterated his position of buying assets before they are in favor, arguing that if a position is non-consensus, one should hold the asset as it becomes consensus.

Prediction Market Sentiment

Despite Pompliano's bullish bias, cryptocurrency bettors on Polymarket are increasingly bearish. As of this writing, the Polygon-based platform assigned a 62% chance of Bitcoin sliding below $50,000, up from 43% a month ago. Bearish expectations have intensified, with the odds of Bitcoin falling below $45,000 rising to 45%, while the probability of a move below $40,000 jumped to 30%.

The following table summarizes the betting probabilities on Polymarket:

Over $45 million has been wagered on the outcome, making it one of the most keenly watched bets on the platform.

Current Price Action

At the time of writing, Bitcoin was exchanging hands at $58,863.61, down 0.98% in the last 24 hours, according to data from Benzinga Pro.