Bitcoin's Shakeout: Preparing for the Next BTC Surge, Says Cathie Wood

Cathie Wood analyzes Bitcoin’s record deleveraging

Recent events have led to a significant shakeout in Bitcoin, primarily attributed to a glitch at Binance and a $28 billion deleveraging effect. Cathie Wood from ARK Invest argues that this tumultuous market phase may be coming to an end, indicating a shift in institutional demand and the potential for Bitcoin to rise again.

Key Takeaways

Bitcoin's recent downturn was mainly caused by a Binance software glitch, leading to a significant deleveraging.
Cathie Wood believes that the worst of the forced selling is over, and Bitcoin's next phase may see upward movement.
Institutional investors are increasingly recognizing Bitcoin’s value, moving away from debates about its legitimacy.
Current Bitcoin prices are experiencing slight declines, despite these optimistic forecasts.

Binance Glitch and Historic Deleveraging

Cathie Wood discussed Bitcoin's recent struggles in an interview with Fox Business, attributing the downturn to a software glitch at Binance. This incident resulted in an unprecedented $28 billion in deleveraging, particularly after a flash crash on October 10, 2025. This event marked the largest single-day deleveraging in the history of crypto, where more than $19 billion in leveraged positions were liquidated as Bitcoin's price plummeted from above $122,000 to around $105,000, while Ethereum fell by over 20% within hours.

The selloff was initially triggered by a surprising U.S. tariff announcement affecting Chinese imports, but the real damage came from the exchange's structural issues. Reports described how Binance struggled to manage the extreme market volatility, with some tokens trading near zero, leading to cascading margin calls. Wood characterized this situation as a "systemic shock" rather than typical market fluctuations.

A New Cycle: Institutional Attention

Cathie Wood believes that the worst of this forced selling is now behind BTC. She stated that the October 10 unwinding phase has largely concluded, predicting that Bitcoin will stabilize in the $80,000–90,000 range before continuing its upward trajectory. Wood described the current decline as "the shallowest four-year cycle drop" in Bitcoin's history, emphasizing that the asset represents "three revolutions in one”: a new international monetary system, a technological breakthrough, and the leading asset in an emerging asset class.

Importantly for ARK's investment strategy, Wood highlighted that institutional investors are no longer questioning Bitcoin's legitimacy; instead, they are focusing on how much to invest in this "low-correlation asset." Over 2,000 advisory firms in the U.S. are now investing in crypto Exchange-Traded Products (ETPs), a substantial increase from fewer than 200 before 2024. Custodians currently manage an estimated 5–7% of all outstanding Bitcoin. ARK’s Big Ideas 2026 report suggests that Bitcoin's market value could reach $16 trillion by 2030.

In discussing their own investment product, the ARK 21Shares ETF, Wood made it clear that ARK is "in it to win it," asserting that the support levels should hold as the aftershocks of October’s deleveraging dissipate.

Current Market Snapshot: Major Cryptocurrencies

Despite Wood's positive outlook, Bitcoin's spot prices continue to face pressure. Currently, Bitcoin is trading around €78,700, down approximately 3% from roughly €80,730 just 24 hours earlier. Ethereum is priced around €2,648, marking a decline of about 4% from €2,757 over the same timeframe. Solana is trading close to €199, showing a minor change of approximately -0.22% after a 16.5% increase over the past week.