The crypto market may not be out of the woods yet, but Sean Farrell, head of digital asset strategy at FunStrat, believes digital assets are slowly starting to gain an advantage over traditional markets. Farrell said in a recent podcast that the macro environment continues to put pressure on Bitcoin and altcoins. But he thinks a sharp correction from here could be one of the best buying opportunities of the cycle.
Strategy is no longer the main concern
Farrell said concerns surrounding Michael Saylor’s strategy have been largely alleviated as the company has raised more capital and reduced the immediate risk of a liquidity crunch.
That’s not the end of the story. Strategy still has about $2 billion in annual preferred dividend debt, and it also has about $5 billion in debt that could be repaid to the company by 2027 or early 2028.
These obligations could become a problem if Bitcoin remains stagnant at current levels for years. But for now, Farrell believes the worst-case scenario has largely been avoided.
Why Bitcoin is lagging
Many investors are frustrated that Bitcoin has not kept up with the rise in U.S. stocks. Farrell says that’s actually normal.
Over the past year, corporate earnings have grown faster than global liquidity, making stocks the preferred investment. In such an environment, investors naturally seek out productive assets rather than monetary assets like Bitcoin.
He expects this trend to change over the next three to six months as liquidity conditions improve. If that happens, virtual currencies may once again attract new capital.
Ethereum may have an advantage
Farrell remains bullish on Bitcoin, but argues that Ethereum may offer better upside potential over the next 12 to 18 months.
The launch of Robinhood’s Ethereum Layer-2 blockchain adds another long-term use case to the network. While the platform has yet to generate significant revenue, Farrell said the bigger story is the increasing adoption of tokenized assets and enterprise blockchains built on Ethereum.
He also said that Ethereum currently appears to be a “cleaner trade” as it does not face the same potential overselling as Strategy’s Bitcoin holdings. On top of that, Ethereum developers are rapidly preparing the network for the risks of future quantum computing.
How far will BTC fall?
Despite the short-term uncertainty, Farrell said the risk-reward of cryptocurrencies currently looks more attractive than stocks.
He remains cautious, citing tight liquidity, rising real yields and uncertainty over Federal Reserve policy. Still, even if Bitcoin falls toward the low $50,000s or even $48,000, he sees it as a rare opportunity rather than a reason to panic.
“When I get there, I’ll back up the truck,” Farrell said.
