Bitcoin crashed to nearly $60,000 in early February before bouncing back to around $67,000. Most analysts think the worst is over, but Grok sees more downside ahead. The Elon Musk AI forecasts a BTC price as low as $40,000—a level Bitcoin (CRYPTO: BTC) hasn’t touched since early 2024.
A drop to $40,000 would mark a 68% decline from Bitcoin’s October 2025 peak of $126,000, putting it in the same territory as the crashes of 2018 and 2022. Those drawdowns came after exchange collapses, regulatory crackdowns, and full-blown market panic—but this cycle hasn’t had any of that. So, what would actually need to go wrong for Bitcoin to fall that far?
What Grok Actually Predicts And How It Gets There
Grok’s Bitcoin forecast spans a wide range, from $40,000 in a prolonged bear market to $250,000 if institutional adoption accelerates. The base case lands between $75,000 and $150,000, which would mean Bitcoin roughly doubles from current levels or recovers to its October 2025 highs.
What makes Grok different from other AI models is how it builds these projections. The model pulls real-time data from X, tracking sentiment shifts, viral trends, and crowd psychology as they happen. It also runs thousands of scenario simulations, weighing factors like ETF flows, post-halving supply dynamics, and Fed policy against each other. This approach lets Grok react faster to momentum shifts—but it can also overweight fear during selloffs.
For the bull case to play out, Grok points to three drivers: monthly ETF inflows staying above $3 billion, at least two Fed rate cuts, and continued corporate treasury adoption following Strategy’s playbook. A major catalyst—like a G7 nation adding Bitcoin to reserves—would push the timeline forward.
For the $40,000 bear case, Grok draws on X sentiment data, where technical charts circulating on the platform project $40,000 as Bitcoin’s cycle bottom in 2026. The model treats this as a tail risk rather than a base expectation, but it doesn’t dismiss it. In a scenario where ETF outflows accelerate, the Fed stays hawkish through 2026, and a contagion event hits, Grok sees $40,000 as possible.
Where Other Analysts See Bitcoin’s Floor
Most analysts cluster their estimates of a Bitcoin bottom between $60,000 and $75,000. Carol Alexander, professor of finance at the University of Sussex, expects Bitcoin to trade in a “high-volatility range” of $75,000 to $150,000, with a center of gravity around $110,000. Standard Chartered has trimmed targets twice since December 2025 and now warns of a $50,000 bottom before recovery to $100,000 by year-end.
Other AI models land closer to consensus. ChatGPT projects a $40,000 to $75,000 Bitcoin bottom range if a prolonged crypto winter persists, but weights its base case between $75,000 and $110,000. Claude projects $70,000 to $120,000 in a moderate scenario, with bear cases bottoming around $30,000 to $50,000 only under severe macro stress.
Grok’s $40,000 floor sits 33% to 45% below most of these estimates, making it the most bearish projection among major forecasters.
What Would Need to Happen for Bitcoin to Reach $40K?
The Bitcoin price hitting $40,000 would require multiple negative catalysts hitting simultaneously. Here are four key factors that could ignite a BTC decline toward $40K.
- Hawkish Fed policy extending through 2026: If rate cuts never materialize and inflation stays stubborn, risk assets would remain under pressure. Standard Chartered cites hawkish Fed policy as a key headwind, noting that markets don’t expect easing until Kevin Warsh’s first FOMC meeting as Fed Chair in mid-June at the earliest.
- Major contagion event: Another exchange failure, stablecoin depeg, or protocol collapse could wipe out market confidence. Unlike the 2022 crash, this cycle hasn’t seen the collapse of major platforms—something Standard Chartered notes as a sign of market maturation. But systemic risk never fully disappears.
- ETF outflow acceleration: Since October 2025, Bitcoin ETFs saw roughly 100,000 BTC in net outflows, with average entry prices around $90,000 leaving many investors underwater. If institutions exit en masse, the selling pressure could overwhelm the entire market.
- Macro or geopolitical black swan: War escalation, sovereign debt crisis, or severe recession would push markets into risk-off mode. During recent turmoil, gold surged above $5,000 per ounce on central bank demand while Bitcoin lagged. In a full flight to safety, crypto often trails traditional havens.
For $40,000 to happen, all these forces would need to compound—not just one or two—and the combination is possible but far from probable.
Why Grok’s $40K Bitcoin Forecast Seems Overblown
Grok’s $40,000 floor would require the Bitcoin price to break through every major support level that has held in previous cycles—and a breakdown in institutional conviction that hasn’t materialized despite months of selling pressure. Here’s why that seems unlikely.
- Institutional infrastructure is stronger than ever: Spot Bitcoin ETFs hold roughly $80 billion in assets despite recent outflows, and corporate treasuries have accumulated substantial positions. Strategy alone holds 714,644 BTC on its balance sheet, valued at roughly $49 billion at current prices—a corporate accumulation that provides a floor that didn’t exist in 2018 or even 2022.
- Historical price structure argues against it: Analysts treat Bitcoin’s 2021 peak of $69,000 as a critical support level, as previous resistance often becomes future support. Below that, the 200-week moving average around $58,000 has marked cycle bottoms in 2015, 2019, and 2022. Grok’s $40,000 target would smash through both levels, and that seems unrealistic as of yet.
- Social sentiment data can mislead: Fear-driven conversations often exaggerate pessimism at market bottoms. Grok’s heavy weighting of X sentiment may capture crowd panic rather than fundamental value. Real-world factors like ETF balances, corporate treasuries, and institutional demand suggest Bitcoin is better defended now than in previous cycles.
Is Grok’s $40K Bitcoin Prediction Realistic?
Grok’s $40,000 Bitcoin price prediction reads more like a stress test than a serious forecast. The model assigns higher probability to its $75,000-$150,000 range, and most analysts see $60,000-$75,000 as a more realistic floor.
At $68,000, Bitcoin trades roughly 70% above Grok’s bear case. Reaching that level would require every major support to fail—the 2021 high at $69,000 and the 200-week moving average at $58,000—and that hasn’t happened in any previous cycle without a major platform collapse or systemic crisis.
Bitcoin is more likely to consolidate in its current range until macro conditions clarify. Fed rate cuts and stabilizing ETF flows would reopen the path to $100,000. Without them, $50,000-$60,000 becomes the downside to watch—not $40,000.