Bitwise CIO: Trump Executive Order Could Upend Crypto Market's Four-Year Cycle

BlockBeats News, January 30th, Bitwise Chief Investment Officer Matt Hougan wrote, "Historically, Bitcoin's price cycle has been four years, with three years of a major rally followed by a correction. As expected, 2023 and 2024 performed well. Based on this model, 2025 should also be very good, which is also my expectation. However, investors are starting to doubt whether the market will readjust in 2026, which is natural."

Last week, President Trump issued an executive order that was so optimistic about this space that it made me doubt. The executive order stated that developing the U.S. digital asset ecosystem is a "national priority," paving the way for a clear regulatory framework for cryptocurrency. It considers establishing a "national cryptocurrency reserve." Coupled with the actions taken by the U.S. Securities and Exchange Commission in support of cryptocurrency, it has opened up a path for Wall Street's largest banks and investors to enter this space in a big way.

In my view, the launch of ETFs is a big deal, enough to bring billions of dollars in funding to the crypto ecosystem from new investors. This is the factor driving this cycle. But I believe that the comprehensive mainstreaming of crypto—the mainstreaming envisioned by the Trump executive order, where banks will custody crypto alongside other assets, stablecoins will be widely integrated into the global payment ecosystem, and major institutions will build positions in the crypto space—will bring trillions of dollars in funding.

The question I am pondering is that the positive impact of the executive order and other changes in Washington will manifest over the course of several years, not several months. In the absolute best case, it will take a year to coordinate and implement a new cryptocurrency regulatory framework. The titans of Wall Street will need more time to fully adapt to the possibilities of cryptocurrency.

I guess we have not yet completely overcome the four-year cycle. As the bull market forms, leverage will also increase. Excesses will occur. Bad actors will emerge. At some point, when the market returns to normal, a significant correction may occur.

But my guess is that any correction will be shorter and shallower than in the past few years. Because the cryptocurrency space has matured; there are more types of buyers and value-oriented investors than ever before. I expect there to be fluctuations, but I am not sure if I would bet on a cryptocurrency downturn in 2026."