Haciyev Reşit 
The long-debated four-year Bitcoin cycle in the cryptocurrency markets is back on the agenda. Bitwise Chief Investment Officer (CIO) Matt Hougan suggested that Bitcoin could break this historical cycle in 2026 and reach new all-time highs. According to Hougan, structural changes are permanently transforming Bitcoin’s price behavior.
Why Could Bitcoin Break the Cycle in 2026?
In a note to clients, Matt Hougan stated that Bitcoin has historically experienced a sharp correction after three strong years, but this pattern may no longer hold in 2026. He identifies several key reasons behind this potential change.
Firstly, the impact of Bitcoin halving events is gradually weakening, reducing the extreme price swings seen in previous cycles. Additionally, compared to 2018 and 2022, the possibility of lower interest rates in 2026 could create a more supportive macro environment for Bitcoin. Hougan also believes that sharp crashes driven by leverage will be more limited. Recent large liquidations and a clearer regulatory framework have helped curb excessive risk-taking in the market.
Institutional Adoption Acceleratin
According to Hougan, the most critical factor is the acceleration of institutional adoption. Major financial platforms like Morgan Stanley, Wells Fargo, and Merrill Lynch beginning to allocate to Bitcoin is seen as a major development that could strengthen demand in 2026. In particular, a more crypto-friendly regulatory environment in the U.S. and Wall Street’s growing interest in digital assets enhance Bitcoin’s position as a long-term investment. Hougan emphasizes that this process will not only affect prices but also make the overall market structure more mature.
Lower Volatility and Decreasing Correlation
The Bitwise CIO noted that Bitcoin’s volatility has been steadily declining and that this trend could continue in 2026. He pointed out that throughout 2025, Bitcoin exhibited even lower volatility than Nvidia shares. Moreover, Bitcoin’s correlation with equities is expected to weaken. According to Hougan, crypto-specific factors—such as regulatory progress, ETFs, and institutional inflows—could allow Bitcoin to develop a pricing structure more independent of traditional markets.
Hougan describes this scenario as “strong returns, lower volatility, and decreasing correlation,” a combination that is very attractive for portfolio management.
A Brief Look at 2025 Predictions
Bitwise’s 2025 forecasts were largely correct in terms of institutional and regulatory developments. While Bitcoin, Ethereum, and Solana reached new highs during the year, the ambitious targets previously outlined by Bitwise—$200,000, $7,000, and $750, respectively—were not achieved.
However, developments such as Coinbase joining the S&P 500, Strategy joining the Nasdaq-100, and the adoption of stablecoin legislation in the U.S. indicate that Bitwise’s predictions about market structure were largely accurate.
Assessment
Matt Hougan’s analysis suggests that Bitcoin is no longer just a speculative asset moving in four-year cycles—it is becoming a more mature, deeper, and increasingly institutional-focused investment. ETFs, allocations by major financial institutions, and reduced regulatory uncertainty are key factors supporting this transformation. If the interest rate environment remains supportive for Bitcoin and institutional capital inflows continue to grow as expected, 2026 could mark not just a period of new price highs but also a historic turning point in the permanent evolution of the market structure.
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