Despite bearish markets, Bitwise expects Bitcoin to peak in 2026 as four-year cycles weaken, institutions embrace, volatility declines and correlations decrease.
Bitcoin (BTC) and the broader crypto market are currently struggling in what many believe is an ongoing bear market, but Bitwise Chief Investment Officer Matt Hougan expects the asset to reach new all-time highs in 2026 due to several structural shifts in the market.
In his latest view, Hougan argued that the long-watched four-year Bitcoin cycle, typically driven by the halving, interest rate shifts and debt-driven booms and busts, is losing its influence, making way for a structurally stronger market.
New ATH in 2026?
Historically, Bitcoin has had three strong years followed by a sharp correction, which would imply weakness in 2026, but Bitwise say the forces behind these cycles are now much weaker. The impact of each halving is diminishing over time, interest rates are expected to fall in 2026 instead of rising as they did during previous recessions, and the risk of major market booms has diminished following a reduction in debt burden following record liquidations in late 2025, in addition to clearer regulation.
More importantly, Bitwise points to accelerating institutional adoption as a key driver of the next step up, while noting that the adoption of spot Bitcoin ETFs in 2024 opened the door to institutional capital, and major platforms such as Morgan Stanley, Wells Fargo and Merrill Lynch are expected to start allocating them in 2026.
Meanwhile, Wall Street and fintech companies are increasingly embracing crypto following a pro-crypto regulatory shift following the 2024 US elections.
In addition to price gains, Hougan also predicted that Bitcoin would become less volatile, noting that by 2025 the crypto asset was already less volatile than Nvidia, one of the most widely held stocks on the market. He also explained that Bitcoin’s volatility has been steadily declining for a decade as its investor base broadens through ETFs and other traditional investment products.
This trend reflects the gradual de-risking of BTC as an asset and should continue into 2026.
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Uncoupling from Wall Street
The company also expects Bitcoin’s correlation with stocks to decline, challenging the view that the crypto simply trades like a technology stock. According to Bitwise, data shows that BTC’s correlation with the S&P 500 has generally remained below the level considered meaningfully high. The company believes that certain factors, such as regulatory progress and rising institutional inflows, could push Bitcoin higher, even as stocks come under pressure from high valuations and slowing economic growth.
Bitwise says these trends can collectively deliver strong returns, lower volatility and reduced correlation with traditional markets. Such a setup could potentially generate tens of billions of dollars in new institutional capital by 2026.
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