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In a new investor note published on January 29, 2025, Matt Hougan, director of investments in Bitwise, wondered if the historic market cycle at four years of Bitcoin could finally end. His reasoning is rooted in seismic changes in American policy towards crypto, underlined by a recent decree of President Trump aimed at consolidating the management of the nation in digital assets.
2026 could Bitcoin trend?
Hougan’s note begins with an explanation of the so-called “four-year cycle”, where Bitcoin has generally seen three years of substantial gains followed by a decline. This cycle, he explains, reflects wider boom-bust models on the traditional markets: “The four-year cycle in crypto is motivated by the same forces which lead to larger growth and recession cycles in the ‘General economy, ”he wrote.
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These extensions, fueled by technological breakthroughs or an increase in the interests of investors, often lead to an over-yelling effect, sometimes resulting in fraud or tension on the scale of the industry. Finally, something “breaks” and triggers a market correction, such as the collapse of Mont Gox 2014 or the 2018 dry repression against ICO.
Hougan describes the increase in the current crypto as the “consumer cycle”, emerging from the “massive deterioration” of 2022 caused by failures like FTX, Three Arrows Capital and others. According to him, the last phase of bull took off in March 2023, when Grayscale “won the opening argument” in his legal challenge against the dry on an ETF Bitcoin.
“Bitcoin was negotiated at $ 22,218 when Graycale set up his argument. It is negotiated at $ 102,674 today. The dominant era has arrived. Once an ETF Bitcoin was approved and launched in January 2024, investor entrances increased, more cement of Bitcoin’s acceptance among retail and institutional stakeholders.
The most striking component of Hougan’s analysis is his examination of last week’s decree published by President Trump. The order not only considered the development of the ecosystem of American digital assets as a “national priority”, but it also sparked a clearer regulatory framework for the crypto.
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“Last week, President Trump published an executive decree which was so extremely optimistic for the space that this makes me ask me,” wrote Hougan, noting how the document describes the plans for a “national cryptography stock” potential And encourages banks and financial institutions to accelerate their adoption of digital assets.
Combined with a now more welcoming position in the SEC, Hougan thinks that these measures could release billions of new investments in the coming years, far exceeding the hundreds of billions that a FNB market must already have generated.
Hougan’s analysis acknowledges that Bitcoin has historically followed its possible withdrawal model after racing. But with the Wall Street giants and the big banks preparing to integrate the crypto at all levels, there is an increasing possibility that the market is not confronted with traditional diving in 2026: “If it is only the Next year that we feel these impacts, will we really have a new “Crypto Winter” in 2026? He posed. “If the CEO of Blackrock, Larry Fink, asks $ 700,000 Bitcoin, are we really going to see a 70%decline?”
Although he concedes that the lever effect continues to develop in the system – cite an increase in Bitcoin back loan programs, derivatives and leverage products, it also highlights a more basin in addition diversified of cryptographic investors. This diversity, he maintains, could alleviate serious prints. “I guess we did not fully overcome the four -year cycle. The lever effect will accumulate as the Haussier market is built. An excess will appear. The bad actors will emerge. And at one point, there could be a lively withdrawal when the market exceeds its skis, “said Hougan.
However, Hougan expects any future market correction to be “shorter and less deep” than previous cycles. With the industry infrastructure now much more robust and traditional participants dealing crypto as a legitimate asset class, a dramatic bears market similar to those of 2014 or 2018 can be less likely. “For the moment, it’s at full speed,” he concluded. “The cryptographic train leaves the station.”
At the time of the press, the BTC was negotiated at $ 105,275.
Star image created with dall.e, tradingView.com graphic
