Despite bearish markets, Bitwise sees Bitcoin reaching 2026 highs as four-year cycles weaken, institutions embrace, volatility declines, and correlations fall.
Bitcoin (BTC) and the broader crypto market are currently struggling amid what many believe is a persistent bear market, but Bitwise’s Chief Investment Officer Matt Hougan expects the asset to reach new all-time highs in 2026 due to several structural shifts in the market.
In his latest outlook, Hougan argued that the long-followed four-year Bitcoin cycle, typically driven by the halving, interest rate shifts, and leverage-fueled booms and busts, is losing its influence, which makes room for a structurally stronger market.
New ATH in 2026?
Historically, Bitcoin has seen three strong years followed by a sharp correction, which would imply weakness in 2026, but Bitwise says the forces behind those cycles are now much weaker. The impact of each halving is diminishing over time, interest rates are expected to fall in 2026 rather than rise as they did during previous downturns, and the risk of major market blow-ups has declined following a reduction in leverage after record liquidations in late 2025, alongside clearer regulation.
More importantly, Bitwise points to accelerating institutional adoption as a major driver of the next leg higher, while noting that the approval of spot Bitcoin ETFs in 2024 opened the door to institutional capital, and major platforms such as Morgan Stanley, Wells Fargo, and Merrill Lynch are expected to begin allocating in 2026.
Meanwhile, Wall Street and fintech firms are increasingly embracing crypto following a pro-crypto regulatory shift after the 2024 US election.
Beyond price gains, Hougan also predicted that Bitcoin would become less volatile and observed that in 2025, the crypto asset was already less volatile than Nvidia, one of the most widely held stocks in the market. He also explained that Bitcoin’s volatility has been steadily declining for a decade as its investor base broadens through ETFs and other traditional investment products.
This trend reflects BTC’s gradual derisking as an asset and should continue into 2026.
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Decoupling From Wall Street
The firm also expects Bitcoin’s correlation with stocks to fall, thus challenging the view that the crypto simply trades like a tech stock. According to Bitwise, data shows BTC’s correlation with the S&P 500 has usually remained below levels considered meaningfully high. The firm believes certain factors, such as regulatory progress and rising institutional inflows, could push Bitcoin higher even as equities face pressure from high valuations and slowing economic growth.
Bitwise says these trends collectively could deliver strong returns, lower volatility, and reduced correlation with traditional markets. Such a setup could potentially draw tens of billions of dollars in new institutional capital in 2026.
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