ARK Invest says bitcoin fundamentals, adoption trends and the macroeconomic environment are aligning to support continued strength into the final months of 2025, even as cycle dynamics indicate the need for caution.
Chain signals point to structural strength
In its latest “Bitcoin Quarterly” report for the three months ending September 30, Cathie Wood’s ARK Invest argues that bitcoin’s core fundamentals remain firmly intact. The firm notes that network activity, profitability levels and supply distribution continue to reflect strong underlying demand, with long-term holders showing few signs of capitulation.
ARK signals what it calls “bullish” on-chain positioning, in which most coins remain in profit and in the hands of investors with low propensity to spend. This dynamic, he says, has historically coincided with sustained bull market phases and offers a favorable basis for price performance as the fourth quarter begins.
The firm also highlights the growing role of medium-sized investors, who have been steadily expanding their positions in recent months. According to the report, this renewed accumulation, combined with a slowdown in sales by large holders, suggests a healthier and more organic recovery structure than in previous market cycles.
Institutional participation reaches new milestone
ARK emphasizes that institutional adoption continues to expand at a rapid pace. Digital asset trusts and spot bitcoin exchange-traded funds now collectively hold around 12.2% of the total supply, a record share that ARK believes underscores bitcoin’s growing integration into traditional capital markets.
The firm maintains that this increasing level of institutional participation provides a more stable demand base and increases the likelihood that bitcoin will be treated as a strategic portfolio allocation rather than a purely speculative asset. It also notes that regulated investment vehicles continue to absorb new supply, which could reduce the available float and magnify the impact on prices of new capital inflows in the coming months.
Macroeconomic environment may drive higher demand
Beyond institutional and on-chain metrics, ARK points to macroeconomic factors that could drive demand for bitcoin as 2025 comes to a close. Inflation pressures, according to the company, remain contained, while signs of labor market weakness are prompting a gradual change in Federal Reserve policy.
ARK believes this shift, along with government moves toward deregulation and tax cuts, could pave the way for “productivity-driven growth,” an environment that has historically benefited risk assets, including bitcoin. He argues that this supportive context could reinforce the bullish signals already visible in on-chain data and market positioning.
Outlook: Bullish Momentum with a Cycle-Driven Warning
While the overall outlook is positive, ARK cautions that timing remains an important variable. The firm warns that “cycle timing suggests caution,” as supply distribution and historical precedents point to the possibility of greater volatility later in 2025.
This does not undermine the bullish thesis, but suggests that the price action may include periods of consolidation or steeper swings as the market digests its recent gains.
In its summary of bitcoin’s outlook, ARK concludes that fundamentals and adoption remain strong, institutional ownership is growing, and macroeconomic conditions are improving.
These forces, he says, create a powerful setup for a potential upside, even if investors should remain alert to how market cycles may shape the next phase of the rally.
