Bitcoin has a habit of making people overconfident at the top and overly pessimistic at the bottom. Right now, it’s closer to the second camp. Prices are down. Momentum feels weak. And plenty of investors are already bracing for the next “cycle crash.”
Bitwise thinks that thinking is outdated.
The crypto investment firm believes Bitcoin isn’t heading for a typical post-cycle slump in 2026. Instead, it expects new all-time highs, even after months of choppy price action.
And more importantly, Bitwise says the famous four-year Bitcoin cycle may finally be breaking down.
Why the 4-Year Bitcoin Cycle May Be Ending
For most of Bitcoin’s history, the pattern was clear.
Three strong years. One brutal pullback. Repeat every four years.
Based on that model, 2026 should be a down year.
Bitwise doesn’t agree.
“We don’t see that happening,” wrote Matt Hougan, Bitwise’s CIO.
His reasoning is straightforward. The forces that once drove Bitcoin’s boom-and-bust cycles are losing power.
- Bitcoin halvings still matter, but their impact is fading
- Interest rate cycles don’t hit crypto the way they used to
- Leverage-driven blowups are becoming less dominant
In other words, the old cycle math no longer fits today’s market.
Institutional Money Changed Everything
The biggest shift? Institutions.
Since the approval of Bitcoin ETFs, capital has been flowing into crypto in a very different way. This isn’t fast money chasing hype. It’s long-term capital looking for regulated exposure.
Bitwise believes this steady inflow, combined with improving regulatory clarity, is reshaping Bitcoin’s behavior.
Less panic selling. Fewer extreme swings. More structural demand.
That’s why the firm expects Bitcoin to push past its previous all-time high of $126,080, set in early October, and establish new highs in 2026.
Bitcoin vs. Traditional Markets
Bitcoin is currently trading around $87,750. It’s up slightly on the day, but still more than 25% below its peak.
Zoom out, and the comparison gets interesting.
Over the past year:
- Bitcoin is down roughly 18%
- The Nasdaq is up 14.5%
- The S&P 500 is up about 12%
Bitwise expects that gap to narrow, and possibly reverse, as Bitcoin’s correlation to equities continues to fall.
They even predict something that would have sounded absurd a few years ago:
Bitcoin could become less volatile than Nvidia, the world’s largest public company by market cap.
The “Trifecta” Setup for Investors
Bitwise frames the 2026 outlook as a rare setup:
- Strong potential returns
- Lower volatility
- Reduced correlation to stocks
That combination, they argue, could attract an even broader class of investors who previously stayed on the sidelines.
It’s Not Just Bitcoin
Bitwise’s outlook goes beyond BTC.
The firm expects:
- Crypto-related equities to outperform traditional tech stocks
- Around half of Ivy League endowments to gain crypto exposure
- New highs for Ethereum and Solana, if regulation improves
A key factor is the CLARITY Act, a proposed U.S. market structure bill. If passed, it could provide long-awaited guidance for crypto regulation and accelerate growth in tokenization and stablecoins.
Bitwise calls these trends “megatrends” and believes layer-1 blockchains like Ethereum and Solana stand to benefit the most.
The takeaway is simple. Bitcoin may still be volatile. It may still surprise people. But according to Bitwise, the old four-year cycle that once defined crypto markets is losing relevance.
And if that’s true, 2026 may look a lot less like a crash year, and a lot more like a breakout.
