Bitwise CIO says Bitcoin will establish a new all-time high in 2026 as the forces driving its four-year cycle are weaker.
Pro-crypto regulations and waves of new capital through institutional crypto ETF allocation will help sustain prices in 2026.
Hougan predicts that Bitcoin will maintain a lower volatility than Nvidia and post modest correlation with Stocks in the new year.
Bitcoin (BTC) will hit a new all-time high in 2026 and break its traditional four-year cycle pattern, according to Bitwise CIO Matt Hougan in a Monday note.
Historically, Bitcoin has moved in a four-year cycle, with three significant up years followed by a sharp pullback year. According to this cycle, 2026 should be a pullback year, especially considering that the most recent halving occurred in April 2024, over 18 months ago.
However, Hougan argues that the factors driving previous cycles have weakened while new structural dynamics are taking hold.
"In our view, the forces that previously drove four-year cycles — the Bitcoin halving, interest rate cycles, and crypto's leverage-fueled booms and busts — are significantly weaker than they've been in past cycles," wrote Hougan.
The Bitwise CIO expects the wave of institutional capital that began entering crypto following the approval of Bitcoin Exchange Traded Funds (ETFs) to accelerate in 2026 as platforms like Morgan Stanley, Wells Fargo, and Merrill Lynch begin allocating. Just this month, Bank of America permitted its financial advisers to recommend Bitcoin ETFs, potentially channeling portions of the bank's $3.5 trillion in client assets into crypto ETFs.
The research arm of asset manager Grayscale echoed Bitwise's transformation thesis, projecting Bitcoin will set fresh records in the first half of 2026 as the market transitions into what it calls the institutional era. Grayscale identifies macro demand for alternative stores of value amid rising public debt and improved regulatory clarity as supporting factors.
Hougan also noted that interest rate cycles are now positive for crypto, in contrast to 2018 and 2022, when rising rates pressured digital assets. The US Federal Reserve (Fed) cut rates three times in 2025 and expects to continue easing next year.
Bitcoin's volatility and Stock correlation to drop in 2026
Bitwise highlighted that Bitcoin's volatility has steadily decreased over the past decade, with the top crypto experiencing less volatile price changes than Nvidia throughout 2025. The firm expects the trend to continue into the new year.
In addition, Hougan predicts Bitcoin's correlation with Stocks will fall in 2026 as crypto regulatory progress and institutional adoption push prices upward "even as equities struggle with concerns about valuation and short-term economic growth."
Bitcoin maintained its strong correlation with the NASDAQ-100 index throughout 2025. However, recent price data shows the top crypto only followed the index during periods of price declines.
BTC is trading near $87,000, down nearly 1% at the time of publication on Wednesday.
