Bitwise Chief Investment Officer Matt Hougan has outlined bold expectations for bitcoin in 2026, arguing the asset will break its well-known four-year market cycle and set new all-time highs.

Prediction of a cycle break

Traditionally, bitcoin follows a pattern of three strong years followed by a sharp pullback, a cycle widely tracked by investors.

With bitcoin down over 30% from its October peak near $126,000, many anticipate a bearish 2026. However, in a recent note to clients, Hougan stated:

“The four-year cycle is dead.”

He attributed this shift to several factors:

The weakening impact of bitcoin’s periodic block subsidy halving, expectations for falling interest rates, and the stabilization of the market after record liquidations and improved regulation.

Crucially, Hougan believes that institutional adoption will accelerate, with major firms like Morgan Stanley and Merrill Lynch expected to allocate to bitcoin, supported by a friendlier regulatory environment.

Volatility and correlations expected to fall

Hougan noted that bitcoin’s volatility has been trending lower, pointing out it was less volatile than Nvidia stock throughout 2025.

He linked this to broader adoption through vehicles like exchange-traded funds.

Additionally, he argued bitcoin’s correlation with equities should decline as crypto-specific factors drive performance, making the asset more attractive for portfolio diversification.

Review of recent predictions

Looking back at Bitwise’s 2025 forecasts, Hougan acknowledged that while their bullish thesis on institutional and regulatory progress was validated, price targets for bitcoin and other major assets were overly optimistic.

Despite this, key milestones such as Coinbase joining the S&P 500 and new bitcoin ETF inflows were realized, highlighting the sector’s ongoing evolution.