UPDATE: Bitcoin (BTC) is poised to reach a new all-time high in 2026, shattering its traditional four-year cycle, according to a bold prediction from Bitwise CIO Matt Hougan in a note released Monday. This forecast comes as the cryptocurrency sector prepares for a surge in institutional investment and pro-crypto regulations.
Authorities confirm that the weakening of previously dominant factors, such as the Bitcoin halving and interest rate cycles, will reshape the market. Hougan asserts that these shifts will stabilize Bitcoin’s price, with institutional capital flooding in as major financial firms like Morgan Stanley, Wells Fargo, and Bank of America ramp up their crypto ETF allocations.
This month, Bank of America has allowed its financial advisors to recommend Bitcoin ETFs, potentially directing parts of its $3.5 trillion in client assets into cryptocurrency. The anticipated influx of capital is expected to create a robust foundation for Bitcoin’s price trajectory in 2026.
Historically, Bitcoin has operated within a predictable four-year cycle: three years of gains followed by one year of steep declines. However, Hougan argues that the conditions leading to this cycle have weakened significantly. “The forces that previously drove four-year cycles are significantly weaker than they’ve been in past cycles,” he stated.
Moreover, the research arm of asset manager Grayscale supports this transformative thesis, predicting Bitcoin will set fresh records in the first half of 2026 as the market enters what they term the “institutional era.” Factors such as macro demand for alternative stores of value and improved regulatory clarity are expected to drive this change.
Additionally, Hougan notes that interest rate cycles are now favorable for cryptocurrency. The U.S. Federal Reserve has cut rates three times in 2025 and is expected to continue easing, contrasting sharply with the tightening phases of 2018 and 2022 that pressured digital assets.
Bitwise’s analysis also reveals a significant drop in Bitcoin’s volatility, which has shown to be lower than that of Nvidia throughout 2025. This trend is believed to be a precursor to even greater stability in 2026. Furthermore, Hougan predicts that Bitcoin’s correlation with stock markets will decrease as regulatory progress and institutional adoption rise, even as equities grapple with valuation concerns.
Currently, Bitcoin is trading near $87,000, experiencing a minor decline of nearly 1% as of Wednesday. As the market anticipates these developments, investors are urged to keep a close watch on upcoming regulatory changes and institutional movements that could dramatically influence Bitcoin’s ascent.
What’s Next: As we move into 2026, market participants should prepare for potential volatility as institutional interest grows. The evolving landscape will be critical for Bitcoin’s trajectory, and stakeholders are encouraged to stay informed about regulatory advancements and ETF approvals that could further propel Bitcoin into the limelight.
This groundbreaking prediction from Bitwise not only highlights the shifting dynamics within the cryptocurrency market but also sets the stage for an exciting year ahead for Bitcoin investors and enthusiasts alike. Stay tuned for further updates as this story develops!
