Why 70% of Institutions Say Bitcoin Is 'Undervalued'

Short version: many big-money players will say we’re in a bear market right now, but most of them also think Bitcoin is cheap on a longer horizon. Sounds like a mood swing? It’s not—they’re describing how they’re positioned today versus what they think will happen down the road.

Bear vibes now, bargain-hunting later

After the October deleveraging, institutions got nervous about leverage and small-cap tokens blowing up. That sell-off wasn’t uniform: it mostly torched the long tail of altcoins, while Bitcoin barely budged in market share. So while a chunk of institutions call the current regime a bear market, many still view Bitcoin as a durable place to park capital.

Why the split? Because “bear market” is being used as a description of the current trading environment — selective liquidity, defensive positioning, choppy or down-trending price action — whereas “undervalued” is a longer-term, macro-and-structure judgment. Institutions look past day-to-day candles and evaluate adoption, scarcity, improved market plumbing, and the policy backdrop when deciding whether Bitcoin is worth owning.

How institutions are staying in the game (without getting squeezed)

The playbook changed after October. Instead of piling into perpetual futures and riding leverage, many pros shifted toward options and basis trades — strategies that give exposure or yield while capping the risk of getting force-liquidated on a nasty swing. Options open interest has climbed relative to perpetuals, and put-call skews show traders are buying protection. Translation: they still want exposure, but they want defined downside.

On-chain and sentiment measures reflect the same behavior. Metrics moved from optimistic to wary, not to full-on panic: long-term holders aren’t bailing en masse, but activity picked up in the short(er) buckets. Some coins moved quickly (distribution into strength), while other coins that were dormant stayed put. That looks like de-risking into rallies rather than a wholesale exit from crypto.

Bottom line: institutions are slimming down fragile leverage, keeping exposure to large-cap Bitcoin, and using tools that won’t force them out at the worst time. It’s boring risk management, but it’s effective.

What would actually break this view?

It’s not a simple pullback that would flip their thesis. For institutions to concede that Bitcoin is no longer a value play, several things would likely have to fail together: macro liquidity turning decisively against risk assets, on-chain accumulation metrics rolling over, long-term holders distributing into weakness, and institutional demand drying up. One or two bad signals won’t cut it — they’re looking for a cluster of negatives.

So as long as policy and liquidity remain supportive and on-chain structure looks intact, calling the market a bear today and Bitcoin undervalued for the future is internally consistent. Institutions are basically saying: “We’re trading defensively now, but we still think this puppy can handle big pockets of capital when the macro tide turns.”

In plain English: they’re being cautious without panicking — keeping a seat at the table while avoiding the leaky chairs.