According to Bitwise, despite Bitcoin’s recent period of sluggish performance over the past few months, underlying fundamentals are shifting significantly and could be strong enough to propel BTC well beyond its previous record high of $126,080, set in early October.
Bitwise Chief Investment Officer Matt Hougan noted that Bitcoin has historically followed a four-year cycle, typically characterized by three strong growth years followed by a sharp correction. Under this model, 2026 would normally be expected to be a pullback year. However, Bitwise does not believe this scenario will play out.
Hougan argued that the forces that once drove the four-year cycle—including Bitcoin halving events, interest-rate cycles, and leverage-fueled boom-and-bust phases—have weakened considerably compared to previous cycles. In contrast, the market is now supported by more durable institutional capital, particularly following the approval of spot Bitcoin ETFs, along with increasingly favorable regulatory developments in the United States.
Bitwise expects this combination of factors to push Bitcoin to new all-time highs, effectively “consigning the four-year cycle to history.”
At the time of writing, Bitcoin was trading around $87,800, up roughly 2% over the past 24 hours but still more than 30% below its all-time high. Over the past year, BTC is down nearly 18%, while traditional equity indices such as the Nasdaq and the S&P 500 have risen by about 14.5% and 12%, respectively.
Looking ahead, Bitwise anticipates that Bitcoin’s correlation with the stock market will continue to decline in 2026, again citing regulatory progress and growing institutional adoption. Notably, the firm also predicts that Bitcoin—historically known for its volatility—could become less volatile than Nvidia stock, a leading AI play and the world’s largest publicly traded company by market capitalization.
In Bitwise’s view, the end of the four-year cycle, combined with strong returns, lower volatility, and reduced correlation with equities, could deliver a “perfect trifecta” for Bitcoin investors in the coming years.
Beyond Bitcoin, Bitwise’s 2026 outlook includes several other notable predictions: crypto-related equities could outperform tech stocks; half of Ivy League endowments may allocate capital to crypto; and both Ethereum and Solana could reach new all-time highs—provided the CLARITY Act is passed.
The firm expects these two layer-1 blockchains to benefit most from asset tokenization and stablecoins, which it describes as crypto “megatrends.” These trends would be further reinforced if the U.S. CLARITY Act—often referred to as the market structure bill—provides clearer regulatory guidance for the crypto industry.
