Bitwise Chief Investment Officer Matt Hougan has recently raised doubts about the traditional four-year cycle that Bitcoin has historically followed. He suggests that recent policy changes in Washington could potentially extend the current bull market well into 2026 and beyond.
In a communication to clients, Hougan pointed out that Bitcoin has typically experienced three strong years followed by a pullback. He accurately predicted a market rebound in 2023 and 2024 based on this pattern. However, he now believes that the outlook for 2026 may deviate from previous cycles.
Hougan attributes the four-year cycle to economic factors rather than Bitcoin’s halving events. He notes that market upswings usually begin with a significant catalyst that attracts new investors and drives momentum. Eventually, speculative excess leads to corrections, as seen in events like the Mt. Gox collapse in 2014 and the SEC crackdown on ICOs in 2018.
One such catalyst for the current cycle was the Grayscale legal victory against the SEC in March 2023, which Bitwise has dubbed the “Mainstream Cycle.” This victory paved the way for Bitcoin ETFs, which launched in January 2024 and attracted substantial institutional investment. Since then, Bitcoin’s price has skyrocketed from $22,218 to over $102,000.
Recent executive orders by President Donald Trump related to digital assets have introduced a new variable that could potentially fuel another rally to new highs. These orders emphasize expanding the digital asset ecosystem as a national priority, providing regulatory clarity, and hinting at a potential national crypto stockpile. With a more pro-crypto stance within the SEC, Wall Street’s integration into the crypto market could accelerate.
Hougan forecasts that ETF flows and corporate Bitcoin purchases could drive Bitcoin’s price above $200,000 in 2025. Despite growing market leverage through debt-financed Bitcoin purchases and lending programs, he believes that institutional adoption and regulatory support could prevent the severe corrections seen in past cycles.
While speculation-driven pullbacks are still possible, Hougan anticipates that any downturns will be less severe than in previous cycles due to the maturation of the crypto market. With increasing institutional participation, he envisions long-term upward momentum continuing despite the inevitable volatility.
Hougan suggests that as the crypto market evolves, traditional market cycles may no longer apply. Instead, there is a shift towards broader institutional integration and sustained investor interest, signaling a new era of stability and growth in the cryptocurrency space.