Matt Hougan from Bitwise shared some interesting insights about the crypto market. He believes that while crypto won’t completely escape its four-year cycle, any pullbacks we see will likely be shorter and less severe than before.
Recently, President Donald Trump issued a crypto executive order. This could shake up the established four-year boom and bust pattern that we've seen over the last decade. According to Hougan, this order, along with changes at the SEC, signals that crypto is going mainstream. Banks and Wall Street are ready to dive in.
Hougan mentioned that crypto exchange-traded funds are substantial enough to attract billions from new investors. He’s confident that Trump’s initiative to explore creating a digital asset stockpile and drafting a regulatory framework could bring trillions into the market.
Historically, Bitcoin has followed a four-year cycle throughout its 16-year history. It faced downturns in 2014, 2018, and 2022, with peaks occurring in the three years between each drop. If this pattern holds, we could see the next pullback in 2026.
While Hougan acknowledges that the industry won’t fully bypass this cycle, he believes that any pullback will be less intense than in the past. He points out that the crypto space has matured. There are more types of buyers now, and many investors are more value-oriented than before. He expects some volatility but isn’t betting against crypto in 2026.
The market downturn in 2022 was influenced by bankruptcies from major players like FTX and Three Arrows Capital. Hougan noted that SEC crackdowns on initial coin offerings and the collapse of Mt. Gox were significant factors in earlier cycles.
He also stated that the impact of Trump’s order won’t be instantly visible. White House crypto czar David Sacks will need time to craft a regulatory framework. Plus, major Wall Street firms will take even longer to fully realize crypto's potential.
With the SEC canceling its Staff Accounting Bulletin 121 rule, Wall Street banks can now hold crypto more easily. This change means they no longer have to treat crypto as liabilities on their balance sheets.
Lastly, Hougan reaffirmed Bitwise’s price prediction of $200,000 for Bitcoin by the end of 2025. He believes this target can be achieved with or without a strategic Bitcoin reserve.