U.S. President Donald Trump’s recent executive order on cryptocurrency may disrupt the market’s traditional four-year boom-and-bust cycle, according to Matt Hougan, chief investment officer at Bitwise.
In a note dated January 29, Hougan described Trump’s sweeping January 23 order as a catalyst for the “full mainstreaming of crypto,” opening the doors for banks and Wall Street institutions to move aggressively into the space. He believes the regulatory clarity and proposed digital asset stockpile could inject trillions of dollars into the crypto market.
Bitcoin has historically followed a four-year cycle, experiencing significant downturns in 2014, 2018, and 2022, with peak growth occurring in the three years between each decline. If the pattern continues, another pullback is expected in 2026.
Hougan suggests that although the crypto market may continue to experience cycles, future downturns will likely be shorter and shallower due to increased market maturity and a diverse investor base focused on long-term value. He notes that the effects of Trump’s executive order will take time to become evident and emphasizes that White House crypto czar David Sacks is expected to develop a regulatory framework. At the same time, Wall Street institutions will need time to incorporate digital assets into their strategies.
Wall Street’s involvement in cryptocurrency has increased due to the SEC’s decision to eliminate Staff Accounting Bulletin 121, which required financial firms to record crypto as liabilities. This change simplifies the process of banks managing digital assets. Bitwise continues to predict Bitcoin will reach $200,000 by the end of 2025, driven by rising institutional interest, according to Hougan.
Previous downturns in the cryptocurrency market were caused mainly by industry collapses, such as the failures of FTX and Galois Capital in 2022. However, Hougan believes that a more resilient market is developing. With increasing regulatory advancements and greater institutional adoption, betting against cryptocurrency in 2026 may not be wise.
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