Bitwise Chief Investment Officer Matt Hougan is increasingly confident that 2026 will be a pivotal year for cryptocurrency markets, anticipating a significant bull run. Speaking at The Bridge conference in New York City, Hougan explained that the absence of a late-2025 rally strengthens the case for a 2026 surge, as a rally this year would have aligned with the traditional four-year cycle, potentially leading to a bear market in 2026, similar to the downturns seen in 2022 and 2018.

Hougan points to several factors driving his optimism. He believes ongoing interest in Bitcoin's debasement trade, the growth of stablecoins, and the increasing tokenization of assets will continue to accelerate. Furthermore, he suggests that Uniswap's fee switch proposal, introduced earlier this week, could revitalize interest in decentralized finance (DeFi) protocols in the coming year. "I think the underlying fundamentals are just so sound," Hougan stated, emphasizing that "these earlier forces, institutional investment, regulatory progress, stablecoins, tokenization, I just think those are too big to keep down. So I think 2026 will be a good year".

Adding to this positive outlook, Hougan highlighted a potentially new era of capital formation within the crypto space, potentially led by a resurgence of regulated Initial Coin Offerings (ICOs). He anticipates that platforms like Coinbase could facilitate several billion-dollar ICOs in 2026, marking a significant shift in how new crypto projects raise funds. This echoes his sentiment that crypto is reinventing capital formation, similar to how it has reinvented gold through Bitcoin and dollars through stablecoins.

Bitwise analysts also predict substantial growth in institutional Bitcoin holdings. By the end of 2026, they expect institutions, including governments and corporations, to control 20% of the total Bitcoin supply, which is approximately 4.2 million BTC. This influx of institutional investment could reach $120 billion in 2025 and $300 billion in 2026, further fueling Bitcoin's growth. The increasing adoption of Bitcoin as a treasury asset by public companies also contributes to long-term demand, potentially leading to over 1 million BTC being held within this paradigm by the end of 2026.

While remaining optimistic, Hougan acknowledges potential risks, particularly the emergence of Bitcoin treasury companies, echoing concerns raised by VanEck. Companies acquiring Bitcoin through stock issuance or debt could face vulnerabilities if prices decline sharply. Despite these risks, Hougan anticipates a "sustained steady boom" rather than explosive short-term gains, while acknowledging that volatility is still likely to occur.

While some analysts anticipate Bitcoin to follow its historical four-year cycle, potentially peaking within months, Hougan believes this cycle is becoming less relevant. He argues that the halving cycle's impact is diminishing, and macroeconomic factors, such as interest rate pressures, could favor crypto over traditional assets. Additionally, increasing regulatory clarity and institutional involvement are reducing risks, paving the way for sustained growth.

Adding to the regulatory aspect, Hougan believes that if the Trump administration delivers on the CLARITY Act, it could trigger an even larger bull run. This hinges on the administration's ability to fulfill its promises without overregulating DeFi, fostering a more favorable environment for crypto innovation and investment.