Despite the recent market downturn, the long-term fundamentals of cryptocurrency remain strong, according to Bitwise CEO Hunter Horsley. Horsley's optimistic outlook comes as Bitcoin and the broader digital asset market experience volatility, with Bitcoin retracing towards $94,500, sparking concerns of a potential bear market.
Several factors contributed to the recent crypto pullback. These include fears of an AI bubble, stalled expectations for interest rate cuts by the Federal Reserve, and the fallout from the U.S. government shutdown, which lasted 43 days and led to the cessation of access to major economic indicators. A provision in a recent funding bill targeting retail hemp products has also shaken investor sentiment.
However, Horsley believes that the current market structure is more robust than ever and that Bitcoin maintains a bullish outlook in the medium to long term. He suggests that the digital asset ecosystem may soon transition into a new bullish phase. Horsley pointed out that with the advent of Bitcoin exchange-traded funds (ETFs) and a new pro-crypto administration, the landscape has evolved significantly. He argued that Bitcoin's traditional four-year cycle is no longer a valid model, as the market is now driven by completely different participants, transaction motivations, and liquidity mechanisms.
Furthermore, Horsley noted that investors consistently turn to Bitcoin when they fear currency debasement, expanding money supply, or inflation. He emphasized that more dollars are flowing into non-traditional, durable-value assets, an environment that directly benefits Bitcoin and the broader digital-asset sector. As Bitcoin increasingly takes market share from gold in these roles, its long-term value proposition strengthens. Despite the recent volatility, Bitwise recorded its largest quarterly inflows in seven years, signaling rising institutional conviction. Horsley said this backdrop makes current prices a "reasonable entry point" for long-term investors.
Corroborating this view, Bitwise Chief Investment Officer Matt Hougan expects Bitcoin's real bull market to arrive in 2026 due to strong underlying fundamentals. Hougan attributes the recent market pullback to discouraged retail investors, while traditional retail shows continued interest via Bitcoin ETFs. He sees growing institutional investment, regulatory progress, and the rise of stablecoins and tokenization as factors supporting long-term momentum in the space.
Regulatory developments also signal a potential inflection point for crypto. The U.S. Commodity Futures Trading Commission (CFTC) is advancing plans to approve leveraged spot crypto trading, aligning with broader efforts to bring crypto under a clearer regulatory framework.
While some analysts have predicted that Bitcoin could reach $250,000 by year-end, Hougan is more conservative but maintains optimism for new highs in 2026. Horsley reiterated Bitwise's thesis that Bitcoin could reach $1 million within a decade, supported by growing demand for assets that hedge inflation and store value, an increasing share of that demand shifting toward Bitcoin, and global capital seeking alternatives outside traditional financial markets.
