Bitwise CIO declares the crypto cycle dead—institutions are the new drivers

Bitwise Chief Investment Officer Matt Hougan has declared the traditional four-year cryptocurrency cycle dead. He also argued that institutional adoption and regulatory progress will overwhelm historical cyclical patterns.

Hougan contends that forces driving previous cycles have weakened while new multi-year trends are changing the market.

“The forces that have created prior four-year cycles are weaker,” Hougan posted on X, citing three key factors: Bitcoin halvings becoming less significant over time, interest rate cycles turning positive for crypto, and reduced blow-up risks due to improved regulation and institutionalization.

ETF flows drive new timeline

Hougan identified several forces operating on longer timelines than the traditional four-year pattern.

ETF asset migration represents a 5-10 year trend that began in 2024, while broader institutional adoption is “just getting started” with ETFs still gaining approval on national platforms.

“Pensions and endowments just now considering crypto,” Hougan noted, while regulatory progress that began in January “will run for multiple years.”

Wall Street’s crypto infrastructure investment, accelerating after the GENIUS Act passage, will continue “in the quarters and years to come.”

During a recent conversation with analysts Kyle Chassé and James Seyffart, Hougan predicted 2026 will be “a good year” despite expected volatility. He characterized the outlook as “sustained steady boom” rather than a super-cycle.

Cycle amplitude expected to diminish

While some analysts maintain that crypto cycles will continue with reduced amplitude, Hougan argued that institutional participation fundamentally changes the market situation.

James Seyffart suggested cycles remain “intact, but muted” with smaller price swings as institutional backing provides stability.

“I don’t know if we’ll see like an 80% pullback. Could we see 50 maybe?” Seyffart questioned. He also noted that institutions and Treasury companies create “force buyers” that moderate volatility.

Hougan revealed the extensive institutional onboarding process, with recent compliance packages reaching 650 pages and requiring multiple on-site visits.

Clients beginning quarterly meetings, when Bitcoin ETFs launched, will complete their evaluation cycles by year-end 2025, positioning them to allocate in 2026.

This timeline supports his thesis that 2026 will break the traditional four-year cycle pattern. Hougan expects record flows in both 2025 and 2026 as institutional due diligence processes conclude.