UPDATE: New reports confirm that Bitcoin (BTC) is poised to reach a new all-time high in 2026, breaking its traditional four-year cycle, according to Matt Hougan, Chief Investment Officer at Bitwise. This transformational prediction signals a significant shift in the cryptocurrency landscape, driven by evolving market dynamics and increased institutional investment.
Authorities have noted that the forces propelling Bitcoin’s historical cycles are weakening. In a Monday note, Hougan emphasized that pro-crypto regulations and the influx of capital through institutional Exchange Traded Funds (ETFs) will help sustain Bitcoin’s price momentum into 2026.
Historically, Bitcoin has followed a predictable four-year cycle, characterized by three up years followed by a sharp pullback. Given that the latest halving occurred in April 2024, many anticipated a pullback year for 2026. However, Hougan argues that previous drivers—such as the Bitcoin halving and interest rate cycles—are less impactful than before.
“In our view, the forces that previously drove four-year cycles are significantly weaker than they’ve been in past cycles,”
wrote Hougan. This assertion suggests a new era for Bitcoin as it adapts to changing market conditions.
Institutional capital is already entering the crypto space, with financial giants like Morgan Stanley, Wells Fargo, and Bank of America beginning to allocate funds to Bitcoin ETFs. Just this month, Bank of America allowed its financial advisers to recommend Bitcoin ETFs, potentially directing a portion of its $3.5 trillion in client assets into the cryptocurrency market.
The research arm of Grayscale has echoed this bullish outlook, projecting that Bitcoin will achieve record levels in early 2026. They attribute this potential surge to increasing macro demand for alternative stores of value amid rising public debt and improving regulatory clarity.
Interestingly, Hougan noted that the current interest rate environment is now favorable for crypto, contrasting sharply with conditions in 2018 and 2022, when rising rates pressured digital assets. The U.S. Federal Reserve cut rates three times in 2025 and is expected to continue easing, creating a conducive atmosphere for Bitcoin’s growth.
Moreover, Bitwise predicts that Bitcoin’s volatility will decline further in 2026, with the cryptocurrency experiencing less volatility than tech giant Nvidia throughout 2025. As institutional adoption accelerates, the firm anticipates that Bitcoin’s correlation with stocks will diminish, allowing it to rise even as equity markets face valuation challenges.
Currently, Bitcoin is trading near $87,000, down nearly 1% as of Wednesday. Traders and investors are closely monitoring these developments, as Bitcoin’s trajectory could reshape investment strategies in the coming year.
As the market transitions into what Grayscale calls the “institutional era,” all eyes will be on Bitcoin’s performance in 2026. The implications of these predictions extend beyond the cryptocurrency market, potentially influencing broader economic trends as institutional capital continues to flow into digital assets.
Stay tuned for more updates as this story develops.
