Bitcoin (BTC) is currently in a bear market, but Bitwise’s Chief Investment Officer, Matt Hougan, forecasts that Bitcoin will reach new all-time highs by 2026. He attributes this expectation to various structural shifts in the crypto market.

Hougan asserts that the well-known four-year Bitcoin cycle, influenced by halving events and market volatility, is losing its potency, thereby paving the way for a stronger market framework.

Could 2026 Bring New ATH?

Historically, Bitcoin experiences three robust years succeeded by a sharp market correction, suggesting potential weakness in 2026. However, Bitwise claims that the factors driving these cycles are weakening. Effects from halvings are waning, interest rates may decrease in 2026, and significant market upheavals are less likely due to reduced leverage following substantial liquidations in late 2025.

Bitwise highlights increasing institutional investment as a key driver for the expected price surge, noting the approval of spot Bitcoin ETFs in 2024 as a catalyst for institutional capital influx, with major firms like Morgan Stanley anticipated to allocate resources in 2026.

Additionally, the changing regulatory climate following the 2024 U.S. elections is expected to encourage more Wall Street firms to adopt cryptocurrencies.

Beyond price expectations, Hougan predicts that Bitcoin’s volatility will lessen, with the crypto asset already showing lower volatility than Nvidia in 2025—indicative of Bitcoin’s gradual de-risking as an investment.

Evolving Market Dynamics

Bitwise also believes that Bitcoin’s correlation with traditional stocks will decrease, suggesting that it will not behave merely like a tech stock. Factors such as regulatory advancements and heightened institutional inflows could allow Bitcoin to rise despite challenges faced by equities.

This combination of lower volatility and reduced correlation could potentially attract significant institutional investment, amounting to tens of billions of dollars by 2026.