Key Points
- Bitwise CIO Matt Hougan predicts a potential shift in Bitcoin’s traditional four-year cycle due to President Trump’s Executive Order on cryptocurrency.
- This order may stimulate significant investment in crypto, possibly disrupting the established market cycle.
Bitcoin, for several years, has adhered to a four-year cycle that includes three years of growth followed by a significant crash.
This cycle is a tool that investors and analysts often use to predict market trends.
The Potential Impact of Trump’s Executive Order
Matt Hougan, Bitwise’s Chief Investment Officer, has suggested that this cycle may soon be disrupted.
He attributes this potential disruption to President Trump’s recent Executive Order on cryptocurrency.
This executive order, one of Trump’s initial actions in office, places a focus on cryptocurrency.
It establishes a task force to investigate the possibility of a U.S. digital asset reserve, thereby making crypto a national priority.
Hougan speculates that this decision could attract significant investment from institutions, corporations, and governments.
If this were to occur, it could fundamentally alter the crypto market and challenge the traditional four-year cycle.
Hougan predicts that Bitcoin’s price will double this year, exceeding $200,000.
He also notes that more companies are borrowing to buy Bitcoin, indicating that demand is stronger than ever.
Simultaneously, lending programs allow investors to utilize their Bitcoin wealth without selling it, contributing to its long-term value.
Changes in the Crypto Market
A significant shift in the market is the increasing number of leveraged exchange-traded funds (ETF) and complex financial products associated with Bitcoin.
These changes suggest that the market is becoming more aggressive and speculative.
Under normal circumstances, this would confirm the continuation of Bitcoin’s four-year cycle.
However, with the support of Trump’s executive order, Hougan believes the market could be entering a new phase that does not follow past patterns.
The executive order also paves the way for clear crypto regulations, potentially integrating Bitcoin into mainstream finance.
Hougan envisions a future where banks treat Bitcoin like cash and stocks, stablecoins are used for everyday transactions, and major financial institutions invest heavily in crypto.
The approval of Bitcoin ETFs in early 2024 was a significant step, attracting billions of dollars.
However, full adoption, as envisioned by Trump’s order, could bring in trillions.
This could disrupt Bitcoin’s traditional cycle and herald a new era.
Future of Bitcoin
Bitcoin has always followed a pattern of rising for three years before crashing by up to 74%, leading to what investors call a “crypto winter.”
Given Bitcoin’s performance in 2023 and 2024, many anticipate another crash in 2026.
However, Hougan doubts this will happen.
He believes the market has evolved since the 2022 collapse of firms like FTX and Celsius Network, with institutional investors stabilizing Bitcoin.
He also referenced BlackRock CEO Larry Fink’s prediction of Bitcoin reaching $700,000, questioning whether such a positive future outlook aligns with a major crash.
While corrections may still happen, Hougan expects them to be smaller and shorter.
