Bitwise's investment chief Matt Hougan recently pointed out that President Trump's crypto executive order may drive mainstream adoption and potentially break Bitcoin's traditional four-year market cycle. He predicts Bitcoin will surpass $200,000, with market corrections being shorter and shallower, and emphasizes that banks and government agencies will accelerate their entry into the market.
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ToggleWill Trump's Crypto Executive Order Break Market Conventions?
In a report sent to clients yesterday, Matt Hougan pointed out that the crypto executive order recently issued by President Trump may cause the market to break away from its traditional four-year cycle and enter a more long-term, stable growth phase.
If we still follow the traditional four-year cycle, 2025 would be the golden year for the crypto market, and we had previously predicted that Bitcoin's price would double this year, breaking through $200,000.
He emphasized that its current price is mainly driven by "inflows of ETF funds and Bitcoin purchases by corporations and governments," and this forecast may still be somewhat conservative.
However, Hougan also warned that the market may have shown signs of overheating, such as more and more companies buying Bitcoin through debt issuance or financing, and holders using loan mechanisms to cash out their Bitcoin assets. Additionally, the surging trading volume of derivatives contracts and leveraged ETFs further indicates a high market sentiment.
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He stated that according to the traditional four-year cycle, these signals should indicate that the market is still following the old pattern. However, Trump's crypto executive order could be a key variable affecting the market structure.
Hougan: Crypto Mainstream Adoption is Just Beginning
Hougan emphasized that Trump's executive order not only indicates an intention to explore Bitcoin as a strategic reserve, but also lists "developing the US digital asset ecosystem" as a national priority, laying an important foundation for the regulation and development of the crypto market:
The launch of ETFs has brought billions of dollars in new capital to the crypto market, but the true mainstream adoption of crypto is just beginning.
He predicts that Trump's executive order has provided a clear direction for regulation, including banks being able to custody crypto assets in the future, stablecoins being widely used in global payment systems, and the world's largest financial institutions establishing digital asset investment divisions - all of which will bring trillions of dollars in capital inflows to the market.
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With the improvement of the regulatory environment, the market will see widespread participation from "banks, corporations, and government agencies," ultimately driving Bitcoin and cryptocurrencies further into the traditional financial system.
Will There Still Be a Crypto Winter in 2026?
Looking back, Bitcoin's price has historically followed a four-year cycle, typically with three consecutive years of growth followed by a 58% to 74% correction in the fourth year.
Hougan explained that the formation of this market cycle is highly related to Bitcoin's own halving mechanism, the market's predictive psychology, and major events at the time, including:
- 2011: The rise of centralized exchanges, driving market growth
- 2014: The collapse of the Mt. Gox exchange
- 2018: The SEC's crackdown on ICOs
He analyzed that the current bear market cycle began in 2022 with the collapse of institutions like FTX, 3AC, and Celsius, and was reignited in March 2023 by Grayscale's legal victory against the SEC, ultimately driving Bitcoin's price to $100,000 after the launch of the Bitcoin spot ETF in January 2024.
Regarding this, Hougan projected forward to 2026 and posed a key question:
If BlackRock CEO Larry Fink predicts Bitcoin will reach $700,000 at that time, will the market still experience a 70% crash like in the past?
Crypto Market to Enter a New Stage
Hougan believes that although the four-year market cycle still exists, as the market matures, future corrections may not be as severe as in the past. He predicts that the magnitude of market corrections will decrease, and the duration will also be shorter.
My guess is that we have not completely escaped the four-year cycle, and when the bull market overheats, leverage will increase, and there will be a sharp correction. However, the current market is in a broad upward trend, the crypto train has already started, and future development will ultimately transcend the past cycle framework.
He reminds that as the US government's attitude towards the crypto market changes, the process of crypto mainstream adoption will further accelerate, and investors should pay attention to changes in the regulatory environment and be prepared to welcome a new round of capital inflows.
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Risk Warning
Crypto asset investment is highly risky, and its price may fluctuate violently, and you may lose your entire principal. Please carefully evaluate the risks.
