ARK Invest says Bitcoin’s fundamentals, adoption trends, and macroeconomic environment align to support continued strength through the final months of 2025, even as cycle dynamics signal the need for caution.
On-Chain Signals Indicate Structural Strength
In its latest “Bitcoin Quarterly” report for the three months ended September 30, Cathie Wood’s ARK Invest asserts that Bitcoin’s fundamental fundamentals remain firmly intact. The company notes that network activity, profitability levels and supply allocation continue to reflect strong underlying demand, with long-term holders showing few signs of capitulation.
ARK highlights what it calls “bullish” positioning on the chain, with the majority of coins remaining profitable and held by investors with a low propensity to spend. This dynamic, he argues, has historically coincided with sustained bull market phases and provides a favorable basis for price action going into the fourth quarter.
The company also highlights the growing role of mid-sized investors, who have gradually strengthened their positions in recent months. This new accumulation, combined with a slowdown in sales from large operators, suggests a healthier and more organic rally structure than in previous market cycles, according to the report.
Institutional participation takes a new step
ARK highlights that institutional adoption continues to grow at a rapid pace. Digital asset trusts and Bitcoin spot exchange-traded funds now collectively hold about 12.2% of the total supply – a record share that ARK says underscores Bitcoin’s growing integration into traditional capital markets.
The company says this growing 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 tighten available float and amplify the price impact of new capital flows in the coming months.
The macroeconomic context could further fuel demand
Beyond on-chain and institutional measures, ARK highlights macroeconomic factors that could boost demand for bitcoin in late 2025. Inflationary pressures, according to the firm, remain contained, while signs of weakness in the labor market prompt a gradual change in Federal Reserve policy.
ARK believes this pivot – alongside government moves towards deregulation and tax cuts – could pave the way for “productivity-led growth”, an environment that has historically benefited risk assets, including bitcoin. According to him, this favorable context could reinforce the bullish signals already visible in on-chain data and market positioning.
Outlook: bullish momentum with a cycle-related caveat
While the overall picture is positive, ARK cautions that timing remains an important variable. The company warns that “the timing of the cycle suggests caution” as supply distribution and historical precedent suggest the possibility of increased volatility later in 2025.
This doesn’t undermine the bullish thesis, but it does suggest that price action may include periods of consolidation or sharper swings as the market digests its recent gains.
In its summary of the Bitcoin outlook, ARK concludes that fundamentals and adoption remain strong, institutional ownership is increasing, and macroeconomic conditions are improving.
These forces, he says, create a powerful setup for upside potential – although investors should remain attentive to how market cycles could shape the next phase of the rally.
