UPDATE: Bitcoin (BTC) is projected to reach a new all-time high in 2026, breaking its traditional four-year cycle, according to a bold forecast from Bitwise Chief Investment Officer Matt Hougan. This transformative prediction, made in a Monday note, underscores a significant shift in the forces driving Bitcoin’s price dynamics.
Just announced: Hougan asserts that the weakening of historical cycle drivers—such as Bitcoin halving events and interest rate fluctuations—will pave the way for a favorable environment for Bitcoin. The anticipated influx of institutional capital, particularly from newly approved Bitcoin Exchange Traded Funds (ETFs), is expected to sustain Bitcoin’s price momentum throughout 2026.
The implications are profound. With major financial institutions like Morgan Stanley and Bank of America actively participating in crypto allocations, Bitcoin could see a significant surge in investment. Just this month, Bank of America authorized its financial advisors to recommend Bitcoin ETFs, potentially redirecting portions of its $3.5 trillion in client assets into cryptocurrencies.
Historically, Bitcoin has followed a four-year cycle, characterized by three years of growth followed by a sharp pullback. By this pattern, 2026 was expected to be a downturn year, especially considering the last halving in April 2024. However, Hougan argues that the landscape has fundamentally changed.
“In our view, the forces that previously drove four-year cycles—such as Bitcoin halving, interest rate cycles, and leverage-fueled booms and busts—are significantly weaker than in past cycles,” stated Hougan. This marks a pivotal moment in the cryptocurrency market, as new structural dynamics take hold.
Supporting this outlook, the research arm of asset manager Grayscale echoes Bitwise’s optimism, forecasting that Bitcoin will likely set new records in the first half of 2026. Grayscale identifies increasing macro demand for alternatives to traditional stores of value amid rising public debt and improved regulatory clarity as key factors driving this change.
With the U.S. Federal Reserve cutting rates three times in 2025 and expected to continue easing, the interest rate environment is now more favorable for cryptocurrencies than during previous periods of rising rates, which pressured digital assets.
Moreover, Hougan predicts a decline in Bitcoin’s volatility and correlation with stock markets in 2026. Bitcoin has already shown a decreasing volatility trend over the past decade, experiencing less price fluctuation than Nvidia throughout 2025. This trend is expected to continue, despite Bitcoin maintaining a strong correlation with the Nasdaq-100 index in recent years.
As of now, Bitcoin is trading near $87,000, down nearly 1% at the time of this report. The market is closely watching how these developments will unfold in the coming months, with heightened interest in Bitcoin’s potential to redefine investment strategies for individuals and institutions alike.
With such transformative predictions on the horizon, the cryptocurrency market stands on the brink of a new era. As institutional players ramp up their involvement, Bitcoin’s trajectory could reshape financial landscapes globally.
Stay tuned for further updates as this story develops, and prepare for what could be a historic year for cryptocurrency in 2026.
