Bitwise CIO Declares Traditional Crypto Market Cycles “Dead”
Matt Hougan, Chief Investment Officer at Bitwise, announced on Friday that the traditional four-year cryptocurrency market cycle is unlikely to continue. He believes that increased institutional demand for digital assets has fundamentally altered the sector’s historical price patterns.
Institutional Demand Reshapes Crypto Cycles
Hougan took to X to share his view that the established four-year crypto market cycle is “dead” due to the surge in institutional interest. He argues that the forces that drove previous cycles have weakened, with larger players now dominating the cryptocurrency landscape.
According to Hougan, crypto cycles have historically been shaped by three key events:
- Bitcoin halvings
- Interest rates and macroeconomic conditions
- High volatility
Bitcoin halvings, which occur roughly every four years, reduce the reward for mining new Bitcoin blocks by 50%. Historically, these events have preceded significant price rallies, as reduced supply coupled with growing demand tends to push prices upward. However, this pattern was disrupted following the U.S. approval of spot Bitcoin exchange-traded funds (ETFs) in January 2024.
The influx of institutional capital following the ETF launches propelled Bitcoin to a new all-time high *before* the April halving event. This suggests that broader, more traditional market forces are now reshaping Bitcoin’s price cycles.
Institutional Adoption Just Beginning
Hougan emphasized that institutional adoption of Bitcoin is “just beginning,” noting that asset allocation to ETFs typically unfolds over a five- to ten-year period. He predicts that 2026 will be “a good year for crypto,” anticipating a “more sustained and steady boom rather than a supercycle.”
The U.S. spot Bitcoin ETFs have significantly contributed to Bitcoin’s upward price trajectory, serving as a clear indicator of growing institutional interest. These funds now manage a combined total of $154 billion in assets, with BlackRock’s iShares Bitcoin Trust (IBIT) leading the way. IBIT surpassed 700,000 BTC in assets under management (AUM) earlier this month.
The increasing presence of large institutional investors has also contributed to a notable decrease in Bitcoin’s volatility. In recent months, BTC has experienced more stable price movements compared to previous cycles, which were often marked by sharp swings driven by macroeconomic uncertainty and interest rate cuts.
“The interest rate cycle is positive for crypto, not negative (as it was in 2018 and 2022),” Hougan added.
Regulatory Progress and Wall Street Interest
Hougan also cited regulatory progress in the cryptocurrency sector as a driving force behind increased demand. He highlighted that Wall Street firms are showing greater interest in cryptocurrencies, particularly since President Trump signed the GENIUS Act last week.
He anticipates major Wall Street firms will invest billions in cryptocurrencies, with recent reports indicating that JPMorgan, Standard Chartered, and Charles Schwab are already exploring the addition of crypto products to their offerings.
Furthermore, national agencies like Fannie Mae and Freddie Mac are also exploring the inclusion of cryptocurrencies as assets for loan considerations.
A Word of Caution
However, Hougan cautions that the rise of treasury companies could pose a threat to the positive sentiment surrounding Bitcoin’s price. He asserts that these companies accumulating Bitcoin are the “biggest emerging cyclical risk.”
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