Matt Hougan, Chief Investment Officer of the U.S. cryptocurrency asset management firm Bitwise, recently published an article discussing how Bit's "three-year bull, one-year correction" pattern may be broken due to U.S. regulatory changes, ETF fund inflows, and the entry of Wall Street institutions, potentially extending this bull market until 2026 or even longer.
Further Reading: Trump Signed Crypto-Friendly Executive Order: Evaluating Bit Strategic Reserves, Banning CBDC Issuance, Establishing New Regulatory Framework
The Four-Year Cycle of Bit: Is There Really a Pattern to Follow?
First, he reviewed the past 14 years, and Bit's price has indeed shown a four-year cycle trend:
- 2011-2013 bull market → 2014 Mt. Gox collapse, market crashed.
- 2015-2017 bull market → 2018 SEC crackdown on ICOs, market crashed.
- 2019-2021 bull market → 2022 FTX, Three Arrows, Celsius collapse, market entered a winter.
By 2023, the market will enter a new cycle, with a key turning point being Grayscale's victory over the SEC, opening the door for a Bit ETF. At that time, Bit's price was only $22,218, but has now surpassed $102,674, with mainstream capital fully entering the market.
According to this pattern, 2025 should be a major Bit bull market, and 2026 may see a correction. But this time, Matt Hougan believes it may be different.
Trump's Executive Order: Will the Bull Market Be Extended?
Last week, Trump signed an extremely positive cryptocurrency executive order, including:
- Treating digital assets as a "national priority" and promoting the U.S. as a global cryptocurrency hub.
- Establishing a clear regulatory framework, ending years of regulatory ambiguity and policy fluctuations.
- Considering the establishment of a "national-level cryptocurrency reserve," which may mean the government will make large-scale purchases of Bit.
Matt Hougan believes this executive order, combined with the SEC's changing attitude, has essentially paved the way for Wall Street institutions to fully enter the market. If Bit ETFs have made it easy for "regular investors" to buy Bit, then Trump's policies have allowed banks, pension funds, and large institutions to confidently hold crypto assets.
This will bring trillions of dollars in capital inflows, fundamentally changing the market structure.
Further Reading: SEC Establishes "Cryptocurrency Task Force" Led by Crypto Mom Hester Peirce: Developing a Clear Regulatory Framework
Will There Be a Crash in 2026?
Analyzing the past four-year cycles, market corrections have often been caused by overleveraging, fraud outbreaks, and regulatory crackdowns. Although the market has already seen a large amount of Bit leverage lending, leveraged ETFs, and derivative products, it is different from the past in the following ways:
- More mature market participants - Previously, the bull market was mainly driven by retail investors, but now it is institutional capital that dominates, reducing market volatility.
- Friendlier regulatory attitude - In the past, market crashes often came from regulatory crackdowns (such as the 2018 ICO collapse), but this time the U.S. government is actually promoting the development of cryptocurrencies.
- Long-term capital entry - Pension funds, sovereign wealth funds, and Wall Street asset management companies typically have holding periods of over 5 years and will not easily withdraw due to short-term price fluctuations.
These factors mean the 2026 market correction may not be as severe as in the past. Finally, Hougan believes:
Will Bit's cycle come to an end? Perhaps not, but this time, the market will not experience a 70% crash like in the past.
