Catenaa, Monday, December 22, 2025- Bitwise Chief Investment Officer Matt Hougan said bitcoin is likely to break its traditional four-year cycle and reach new all-time highs in 2026, citing structural shifts in the market, according to a note released last week.

Hougan argued that the forces behind historical cycles, including the impact of halvings, rising interest rates, and leverage-driven sell-offs, are now weaker.

He highlighted falling interest rate expectations in 2026 and reduced liquidation risks as factors supporting bitcoin’s potential upside.

Institutional adoption is expected to accelerate, with platforms such as Morgan Stanley, Wells Fargo, and Merrill Lynch anticipated to allocate to digital assets.

Hougan said Wall Street and fintech firms will increasingly incorporate crypto following pro-crypto regulatory measures under the Trump administration.

The CIO also forecast lower volatility for bitcoin in 2026, noting it has been less volatile than Nvidia stock in 2025.

He expects correlations between bitcoin and equities to decline, allowing crypto-specific drivers, including regulatory progress and institutional inflows, to support digital assets even amid broader market pressures.

Hougan described the outlook as offering “strong returns, less volatility, and lower correlations,” which he said could attract tens of billions in new institutional investment.

Looking back at 2025, Bitwise’s predictions on institutional momentum and regulation were largely accurate, though price targets for bitcoin, Ethereum, and Solana were overly ambitious.

Other market-structure calls, including Coinbase joining the S&P 500 and U.S. stablecoin legislation, were correctly forecasted.