• Bitwise's Matt Hougan said that the crypto market's historical four-year cycle is "dead".
• He highlighted that growing institutional adoption is not subject to crypto's traditional four-year pattern.
• The approval of Bitcoin ETFs in 2024 broke BTC's historical pattern of only registering a new all-time high after a halving event.

Bitwise Chief Investment Officer (CIO) Matt Hougan stated on Friday that the crypto market's traditional four-year cycle will not continue as institutional demand for digital assets has altered the sector's historical price pattern.

Crypto's rising institutional demand alters four-year cycle pattern

Bitwise CIO Matt Hougan stated in an X post on Friday that the crypto market's four-year cycle is "dead" following increased interest in digital assets.

"[The] forces that have created the prior four-year cycles are weaker," wrote Hougan, highlighting that bigger players now dominate the crypto market.

According to Hougan, three major events make up a crypto cycle, including Bitcoin's halving, interest rates/macroeconomic conditions, and heavy volatility.

Bitcoin halvings occur approximately every four years, reducing the reward for mining new Bitcoin blocks by 50%. Traditionally, Bitcoin halvings have preceded major price rallies, as the lower supply coupled with rising demand tends to push prices higher. However, the historical pattern was disrupted after the US approved spot Bitcoin exchange-traded funds (ETFs) in January 2024.

The influx of institutional capital following their launch drove Bitcoin to a new all-time high before the halving event in April, suggesting that broader traditional market forces may now be reshaping Bitcoin's price cycles.

Hougan mentioned that Bitcoin's institutional adoption is "just getting started," citing that the shift of assets into ETFs typically occurs within a five to ten-year period. He added that 2026 is going to be "a good year for crypto," stating that the market would see a "more sustained, steady boom than a super-cycle."

Spot Bitcoin ETFs in the US have significantly contributed to Bitcoin's upward price trajectory, serving as a clear indicator of rising institutional interest. 

The funds now manage a combined $154 billion in assets with BlackRock's iShares Bitcoin Trust (IBIT) leading the charge. IBIT surpassed 700,000 BTC in assets under management (AUM) earlier in the month.

The growing presence of large institutional investors has contributed to a noticeable decline in Bitcoin's volatility. In recent months, BTC has experienced stable price movements compared to previous cycles, which were often marked by sharp swings driven by macroeconomic uncertainty and interest rate cuts.

"The interest rate cycle is positive for crypto, not negative (as it was in 2018 and 2022)," added Hougan.

Hougan also cited regulatory progress in the crypto sector as a driving force behind increased demand. He highlighted that Wall Street firms are showing more interest in crypto, particularly since President Trump signed the GENIUS bill last week.

He shared that top Wall Street firms will invest billions in crypto, with recent reports indicating that JPMorgan, Standard Chartered and Charles Schwab are already exploring the addition of crypto products to their offerings.

Likewise, national agencies such as Fannie Mae and Freddie Mac are also exploring the inclusion of cryptocurrencies as assets for loan considerations.

However, Hougan warns that the rise of treasury companies could pose a threat to the positivity surrounding Bitcoin's price. He stated that these firms stacking Bitcoin are the "biggest emergent cyclical-style risk."