Bitwise CIO Matt Hougan says the crypto market is anchored to the unsuitable psychological mannequin. Talking on the Empire podcast recorded 5 December and launched on 8 December, he argued that the normal “four-year Bitcoin cycle” has misplaced its explanatory energy – and that 2026, which many anticipate to be a brutal post-halving down 12 months, is way extra more likely to be an “up 12 months” pushed by institutional flows and regulatory tailwinds.
“2026 won’t be a nasty 12 months, Jason,” Hougan instructed host Jason Yanowitz. “I believe 2026 might be an excellent 12 months […] I simply don’t perceive the logical purpose why [the four-year cycle] would repeat once more. It’s not like constructed right into a mechanical clock. It was pushed by particular elements and people elements now not exist, so it gained’t hold taking place.”
He acknowledged that latest worth motion has unnerved traders, with Bitcoin giving again a “Vanguard pump” and promoting off right into a weekend on no apparent information. However he framed that as positioning and microstructure, not the beginning of a structural unwind.
“Folks in crypto during the last two months have discovered to be nervous on weekends,” he mentioned, pointing to skinny weekend liquidity and Friday macro headlines. He famous that sentiment is depressed though “the market is flat for the 12 months,” including: “We’re freaking out a few market that’s flat for the 12 months.”
Why The 4-Yr Crypto Cycle Is Lifeless
Hougan broke down the 4 essential explanations historically used to justify the Bitcoin cycle and argued every is now materially weaker.
First is the halving itself. “The halving cycle is simply not that vital,” he mentioned. “It’s half as vital because it was 4 years in the past […] a fraction of, you understand, 1 / 4 as vital because it was eight years in the past, a sixteenth, and so forth. There’s simply not that a lot provide being eliminated.” As issuance turns into a smaller fraction of complete provide and ETF and derivatives flows develop, the mechanical provide shock carries much less weight.
Second is the speed cycle. Prior “down years” resembling 2018 and 2022 coincided with aggressive charge hikes. “Rates of interest are happening,” he mentioned. “In order that thesis is simply fully invalidated, proper? It’s fully completely different.”
Third is the “blow-up” sample – Mt. Gox, ICOs, FTX – that traditionally capped euphoric phases. Hougan allowed that balance-sheet stress in elements of the market is “the strongest case for the four-year cycle repeating,” however he doesn’t anticipate compelled liquidations on the size of prior collapses. In his view, potential downside entities usually tend to “simply not purchase as a lot sooner or later” somewhat than being compelled sellers.
Fourth is straightforward randomness: three related cycles don’t make a legislation of nature. “Throughout these 4, they’re all a lot weaker than they have been up to now,” he summarised.
Why 2026 Is Poised To Be Higher Than 2025
In opposition to that, Hougan set what he sees as a once-in-a-generation shift in regulation and institutional behaviour. “You’ve gotten a once-in-a-generation regulatory change from extreme regulatory headwinds to robust regulatory tailwinds,” he mentioned, and “extra importantly, you could have this institutional adoption narrative that’s going to overwhelm the whole lot.”
Within the final six months, he famous, main US wirehouses have “green-lit crypto publicity.” He singled out Financial institution of America: “They’ve $3.5 trillion in property. One p.c is $35 billion. 4 p.c is like $140 billion. That’s greater than the entire flows into Bitcoin ETFs to date.” He careworn it’s not only one financial institution: “There are 4 wirehouses. They’re mainly all on now […] the largest advisory teams all managing many trillions of {dollars}.”
The catch is timing. Institutional allocations are sluggish and process-driven. “The common Bitwise shopper, I believe, invests after eight conferences with us,” he mentioned, and a few of these are quarterly. That “eight-meeting” lag means the ETF period continues to be in its early innings; the total impression of platforms being switched on is extra more likely to manifest by way of 2026 than in a single explosive quarter.
Hougan additionally emphasised that advisers optimise for shopper retention, not absolute efficiency. “The one factor a monetary adviser doesn’t need to do is have a gathering with their shopper the place one thing is down 50% and their shopper fires them,” he mentioned. That’s the reason diminished volatility, cleaner regulation and mainstream narratives like “Bitcoin as digital gold” and “stablecoins and tokenization as new monetary rails” matter a lot.
On provide dynamics, he pushed again on two recurring fears: “OG whales dumping” and MicroStrategy as a compelled vendor. He argued that a lot of the obvious “promoting” by long-term holders is definitely upside being bought through coated calls. Whales come to Bitwise and related companies, he mentioned, saying: “I’ve 100 million of Bitcoin […] are you able to write coated calls towards this?” That “successfully introduces new provide into the market” with out cash shifting on-chain.
On MicroStrategy, he was categorical: “From a knowledge perspective [it is] simply strictly unfaithful that it will likely be compelled to promote its Bitcoin.” The corporate has significant money to service curiosity, no principal due till 2027, and manageable maturities relative to its Bitcoin holdings. He agreed with Jeff Dorman’s framing that MicroStrategy is now not a serious marginal purchaser but additionally “not a compelled vendor.”
An excessive amount of pessimism on the timeline.
Introduced on @Matt_Hougan to inform us why 2026 might be FAR higher than 2025.
Tons of excellent nuggets in right here associated to establishments, monetary advisors, cycles, and extra.
Benefit from the optimism!pic.twitter.com/WZJb55yENF
— Yano 🟪 (@JasonYanowitz) December 8, 2025
Trying forward, Hougan expects traders to ultimately reframe the present interval not as a failed bull cycle however as a behavioural transition by way of a key degree. “We’d look again at 2025 sooner or later and say, ‘Huh, you understand what? $100,000 was like an enormous behavioral cliff we needed to recover from. Took us like a 12 months,’” he mentioned.
For 2026 particularly, his message is obvious: the outdated four-year sample “gained’t hold taking place,” and the mixture of regulatory readability and institutional inflows units up what he calls an “terribly robust” backdrop somewhat than a programmed bust.
At press time, the entire crypto market cap stood at $3.06 trillion.
Featured picture from YouTube, chart from TradingView.com
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