Bitwise CIO Says Trump’s Crypto Executive Order Could Disrupt Bitcoin’s 4-Year Cycle

Highlights:

• Bitwise CIO says Bitcoin’s four-year cycle points to a pullback in 2026, but Trump’s order may change it.
• Hougan believes institutional adoption and clear regulations could extend the bull market.
• He predicts Bitcoin will reach $200,000 this year due to increasing corporate and institutional investments.

In a Jan. 29 note to clients, Bitwise Chief Investment Officer (CIO) Matt Hougan said President Donald Trump’s recent crypto executive order could prolong Bitcoin’s bull by altering its four-year historical cycle. 

Bitcoin’s Four-Year Cycle

Bitcoin has followed a four-year cycle throughout its 16-year history, experiencing losses in 2014, 2018, and 2022 while reaching new highs in the three years between each downturn. If the cycle holds, the next pullback is expected in 2026. Hougan believes the industry won’t fully escape the four-year cycle but expects any pullback to be shorter and less severe than in previous years.

Hougan pointed out that the 2022 market decline was fueled by bankruptcies from entities like FTX, Three Arrows Capital, Genesis, BlockFi, and Celsius. He also highlighted the SEC’s ICO crackdown in 2018 and the collapse of Mt. Gox’s collapse in 2014 as key factors behind the pullbacks in earlier cycles. Although some connect the cycle to Bitcoin’s halving, Hougan believes market psychology and speculation drive it.

Hougan describes the current “mainstream cycle” as starting after the 2022 collapse of firms. It gained momentum on March 10, 2023, when Grayscale won its legal case against the SEC, paving the way for spot Bitcoin ETFs. The launch of these ETFs in January last year attracted institutional investors, driving Bitcoin from about $22,000 to over $100,000 in just one year, marking the start of crypto’s mainstream era.

The Bitwise CIO said that the positive effects of Trump’s executive order and other factors may take years to show. This means another crypto winter in 2026 can’t be ruled out.

Hougan wrote:

“True to form, it had a great 2023 and 2024. According to this model, 2025 should be great as well, and that’s what I expect. But it’s natural for investors to start wondering if the markets are in for a reset in 2026.”

Trump’s Executive Order and SEC Changes Propel Crypto into the Mainstream

Trump’s January 23 order, along with SEC changes, has pushed crypto into the mainstream. Banks and Wall Street now have the opportunity to expand aggressively in the industry, Hougan said. However, Trump’s order won’t have an immediate effect, as David Sacks needs time to establish a regulatory framework.

🚨NEW per my @FoxBusiness colleague @EdwardLawrence: The #crypto executive order has officially been signed.

Here are the details:

📌The Executive Order establishes the Presidential Working Group on Digital Asset Markets to strengthen U.S. leadership in digital finance.

📌The…

— Eleanor Terrett (@EleanorTerrett) January 23, 2025

Wall Street’s major players will also take time to fully embrace crypto’s potential. He also noted that Wall Street banks can now hold crypto more easily after the SEC removed a rule that required them to list crypto as liabilities.

Bye, bye SAB 121! It's not been fun: https://t.co/cIwUc0isUE | Staff Accounting Bulletin No. 122

— Hester Peirce (@HesterPeirce) January 23, 2025

Hougan Predicts Bitcoin Will Reach $200,000 in 2025

Hougan noted that crypto ETFs are significant enough to attract billions from new investors. However, he believes Trump’s executive order, which includes plans for a digital asset stockpile and regulatory framework, could bring in trillions. Additionally, Bitwise’s CIO predicted that Bitcoin will reach $200,000 in 2025, fueled by growing institutional involvement and corporate investments.

Matt Hougan stated:

“We’re on the record predicting that bitcoin’s price will double this year to above $200,000, driven by flows into ETFs and Bitcoin purchases by corporations and governments. That may turn out to be conservative.”