Bitcoin Undervalued as Spot ETFs, Fed Transition and Macro Risks Shape Outlook

Bitcoin is still looking cheap to a lot of investors, even with BTC trading below $80,000 and the wider economy flashing warning signs like a dashboard lit up by a bad mechanic.

• 75% of institutions say Bitcoin is undervalued
• Spot Bitcoin ETFs keep pulling in capital
• Macro risk and Fed uncertainty are still the main drag
• Kevin Warsh may step into a politically messy Fed transition

Coinbase’s latest Q2 2026 Charting Crypto report shows that Bitcoin’s long-term case is still winning over a surprising number of investors, even as price action looks less than thrilling in the short term. The survey of more than 91 global investors found that 75% of institutional respondents and 61% of non-institutional participants believe Bitcoin is undervalued. Only 7% of institutions and 11% of non-institutions said BTC is overvalued.

Those views were reportedly largely unchanged from December 2025, which tells you something important: this isn’t a sudden burst of hype. It’s a sustained view that Bitcoin price still hasn’t fully caught up with its growing market structure, liquidity, and role in institutional portfolios.

Bitcoin price outlook stays bullish, even if the tape is messy

Coinbase’s broader crypto market outlook for the quarter was rated “neutral”, and that makes sense. Bitcoin may be undervalued in the eyes of many investors, but the rest of the world is still throwing a few wrenches into the setup.

The biggest headwinds are the usual suspects: geopolitical uncertainty, the Middle East conflict, and a wider economy that is not exactly humming along. The IMF cut its 2026 global GDP growth forecast from 3.4% to 3.1%. Oxford Economics went further, warning that a severe oil disruption could drag growth down to 1.4% if major economies fall into recession.

That matters because Bitcoin often trades like a risk asset when panic takes over. When growth slows, oil spikes, or recession fears build, traders tend to de-risk first and ask questions later. Bitcoin’s long-term thesis may be intact, but short-term markets have the emotional range of a caffeinated raccoon.

Why institutions still call Bitcoin undervalued

The simplest answer is that Bitcoin now looks more like a scarce monetary asset with improving liquidity than a niche internet experiment. The supply schedule is fixed, institutional access is easier than ever, and the market structure has matured fast enough that many allocators no longer treat BTC as a speculative side quest.

David Duong, Coinbase’s Global Head of Research, put it plainly:

“Bitcoin is undervalued.”

That call isn’t just about sentiment. It reflects a broader shift in how investors think about Bitcoin’s place in portfolios. For institutions, the question is no longer whether Bitcoin exists. It’s whether they are underexposed to an asset that has increasingly become part of the macro conversation.

Bitcoin also has something most assets don’t: a globally recognized brand, a hard cap on supply, and growing liquidity. That combo is exactly what large allocators tend to like when they are looking for something that can survive both monetary debasement and institutional due diligence.

Spot Bitcoin ETFs are changing the game

One of the clearest signs of institutional adoption is the continued flow into spot Bitcoin ETFs, which have pulled in nearly $2 billion year-to-date. That figure matters because ETFs make Bitcoin far easier to buy through traditional brokerage and advisory channels.

For newer readers: an ETF, or exchange-traded fund, is an investment product that trades on a stock exchange and tracks the price of an underlying asset. In this case, it gives investors exposure to Bitcoin without requiring them to directly hold the coins themselves.

That convenience is a big deal. It removes a lot of the friction around self-custody, which means holding your own Bitcoin directly rather than relying on a fund, exchange, or third party. Self-custody is the gold standard for decentralization and sovereignty, but it is also more complicated, and not every pension fund or asset manager wants to juggle wallets and seed phrases before lunch.

The upside of ETF adoption is obvious: more capital, more legitimacy, more liquidity. The downside is also obvious: Wall Street gets a bigger seat at the table. That’s great for price discovery and market depth, but it also means Bitcoin is increasingly being wrapped in the same financial machinery it was built to sidestep. Progress, yes. A little ironic? Also yes.

Adrian Fritz, CIO at 21Shares, said Bitcoin is now “institutional ready” because of the liquidity and structure created by ETF access. He also noted that Bitcoin’s daily trading volume is now above $50 billion, putting it in the same ballpark as mega-cap equities like Nvidia.

That volume matters more than a lot of people realize. Deep liquidity makes it easier for big money to enter and exit positions without causing major slippage. In plain English: institutions can buy size without wrecking the market. That is one reason Bitcoin has crossed from “funny internet money” into something that large portfolios can actually hold.

Fritz added that Bitcoin may consolidate near current levels before potentially reaching $100,000 by year-end if the macro backdrop and ETF flows line up. That’s a scenario, not a guarantee. Anyone selling a precise price target like it was engraved on a tablet from Mount Crypto should be treated with skepticism.

The Fed transition could matter more than traders want to admit

Bitcoin may be increasingly institutionalized, but it still moves on liquidity, rates, and the market’s read on the Federal Reserve. That’s why the Fed leadership transition from Jerome Powell to Kevin Warsh is getting so much attention.

Powell held his final Federal Open Market Committee (FOMC) meeting on April 29, 2026, and the Fed kept rates in the 3.50% to 3.75% range. The FOMC is the Fed’s policy-setting committee, and its decisions matter directly for Bitcoin because they influence borrowing costs, liquidity, and risk appetite across markets.

Powell also said he would remain on the Federal Reserve Board of Governors after stepping down as chair on May 15, with his board term running until January 2028. That detail may sound procedural, but it could have real implications. If Powell stays in the room while Warsh steps into the chair role, it may complicate any attempt at a clean policy shift.

Analyst Matt Weller has suggested that Powell’s continued presence could make it harder for Warsh to move quickly on a new agenda. In other words: the next Fed chair may inherit the title, but not a blank slate.

That matters for Bitcoin because Fed policy still shapes the backdrop for risk assets. Lower rates and looser financial conditions tend to support speculative assets. Tighter policy does the opposite. And if the next chair sends a softer signal on inflation or rates, Bitcoin could get a meaningful tailwind.

Krishna Guha of Evercore ISI praised Powell’s record, saying he “achieved the remarkable feat of bringing inflation back down without causing a recession.” Guha also commended “the dignity and professionalism that he brought to public service,” while noting that Powell’s tenure included “the most serious attack on central bank independence in decades.”

That last point deserves emphasis. Central bank independence is not just ivory-tower jargon. It is the difference between monetary policy being set by economic data and monetary policy being bent around political pressure. Markets hate that kind of uncertainty, and Bitcoin is no exception.

Macro risk is still the wet blanket

The bullish case for Bitcoin is getting stronger through ETF flows, institutional adoption, and increasing liquidity. But the market is not operating in a vacuum.

A severe oil shock, fresh geopolitical escalation, or a slowdown in global growth could all hit risk appetite. If recession fears climb, investors tend to move into cash, Treasuries, or other defensive assets. Bitcoin can eventually benefit from monetary instability, but it does not always escape the initial selloff when markets go into panic mode.

That tension is part of what makes Bitcoin hard to classify and even harder to model. On one hand, it can behave like a high-beta risk asset in the short term. On the other, it can look like a hedge against monetary debasement over longer horizons. Both can be true. Markets, inconveniently, are allowed to be messy.

So while Coinbase’s survey is clearly supportive of the Bitcoin price outlook, the broader crypto market outlook remains cautious for good reason. Strong fundamentals do not cancel out weak macro conditions. They just keep the long game alive while the short game throws a tantrum.

What the market is really saying

The message from the survey, the ETF data, and the Fed backdrop is straightforward: Bitcoin is gaining legitimacy faster than the wider economy is stabilizing.

That creates a split-screen market. On one side, institutions are still calling BTC undervalued, ETF inflows continue, and daily liquidity is deep enough to attract major allocators. On the other side, global growth is slowing, geopolitical risks are elevated, and the Fed is entering a leadership transition that could reshape monetary policy expectations.

For Bitcoin bulls, that setup is still constructive. For skeptics, it is a reminder that adoption does not eliminate volatility. It just gives volatility better company.

• Is Bitcoin undervalued right now?
  Yes. Coinbase’s survey found that 75% of institutional investors and 61% of non-institutional participants still see Bitcoin as undervalued.
• Why is the crypto outlook only neutral?
  Because bullish Bitcoin adoption trends are being offset by geopolitical uncertainty, slowing global growth, and Fed-related risk.
• Why do spot Bitcoin ETFs matter?
  They make Bitcoin easier for traditional investors to access and have already pulled in nearly $2 billion year-to-date.
• What does Powell staying on the Fed board mean for Bitcoin?
  It could complicate Kevin Warsh’s policy agenda and slow any sharp shift in the Fed’s direction.
• Could Bitcoin still reach $100,000 this year?
  Some analysts think it is possible if ETF inflows remain strong and macro conditions improve, but it is far from guaranteed.
• What is the biggest risk to the bullish Bitcoin setup?
  A mix of geopolitical escalation, weaker global growth, and tighter-for-longer monetary policy could pressure BTC and the wider crypto market.
• Does this mean Bitcoin is becoming mainstream?
  Yes, increasingly so. Between ETF access, institutional participation, and deep trading volume, Bitcoin is looking more like a mainstream macro asset than a fringe trade.