Mark Twain here, with a twist on the Bitcoin beat! Our friend Matt Hougan, CIO at Bitwise, has been pondering if the good ol’ four-year market cycle of Bitcoin is finally kissing the dust. And what’s got him thinking? A storm of changes in US policy, including a spiffy new executive order from President Trump himself!
Will 2026 Break the Bitcoin Bear Curse? 🧐
Hougan’s note starts by explaining the infamous “four-year cycle,” where Bitcoin usually sees three years of gains, followed by a dip. This cycle, he says, is driven by the same forces that push traditional markets up and down. But, as he puts it, “these expansions, fueled by tech breakthroughs or investor interest, can sometimes lead to over-leverage, resulting in fraud or industry-wide strain.”
Now, Hougan calls the current crypto upswing the “Mainstream Cycle,” which started in March 2023, after the “massive deleveraging” caused by failures like FTX, Three Arrows Capital, and others. And what sparked this bull phase? Grayscale’s legal challenge against the SEC over a spot Bitcoin ETF!
The most intriguing part of Hougan’s analysis is his take on the recent executive order from President Trump. The order not only supports the US digital asset ecosystem but also outlines plans for a “national crypto stockpile” and encourages banks to adopt digital assets. Combined with a more welcoming SEC, Hougan thinks this could bring in trillions in new investment!
But, as always, there’s a catch. Bitcoin has had its share of pullbacks after surging bull runs. But, with Wall Street giants and major banks getting ready to embrace crypto, Hougan wonders if the market will face a traditional plunge in 2026. After all, BlackRock CEO Larry Fink is calling for a $700k Bitcoin!
Still, Hougan admits that leverage is building up in the system, but he also points out a more diverse pool of crypto investors. This diversity, he argues, could soften severe drawdowns. So, buckle up, because the “crypto train is leaving the station!”
At the time of writing, BTC was trading at $105,275.
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2025-01-30 10:53