Matt Hougan, Chief Investment Officer of Bitwise Asset Management, says the crypto market is currently experiencing a classic bear phase, similar to prior “crypto winters” in 2018 and 2022.
Still A Traditional 4-Year Cycle?
Hougan argues that crypto continues to follow its traditional four-year cycle, even if the original catalysts, such as Bitcoin halving’s and major blowups, are less dominant today.
In his view, the cycle persists because market participants believe in it and trade, accordingly, making it reflexive.
While institutions continued accumulating Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) into late 2025, retail investors and many altcoins had already entered deep drawdowns, with numerous tokens down 70% or more.
Extreme fear sentiment readings reinforce his belief that the winter began earlier than many realize.
Despite weak price action, Hougan sees strengthening fundamentals beneath the surface.
He points to:
- Growing institutional activity in DeFi and tokenization
- Major initiatives from BlackRock
- Expansion into tokenized assets by Apollo Global Management
- Continued growth in stablecoins and tokenized real-world assets
Hougan expects ETFs to broaden beyond Bitcoin and Ethereum over time. However, he believes most institutional capital will remain concentrated in top-tier assets or index-style products.
He also downplays concerns about corporate Bitcoin holders like MicroStrategy being forced sellers, arguing that absent an extended 80% drawdown, they are unlikely to liquidate and may continue accumulating, albeit more gradually.
What Comes Next?
Hougan describes 2026 as a likely U-shaped, bottoming year rather than a sharp V-shaped recovery.
While prices may remain sluggish, he expects stablecoin adoption, DeFi innovation and regulatory progress to continue trending “up and to the right.”
In his base case, 2027 could shape up as a significantly stronger year, with prices catching up to improving fundamentals.
That said, he cautions that full global regulatory clarity could take years, framing crypto’s evolution as a 10–15-year structural transformation, not a short-term rebound.
Ultimately, Hougan sees crypto still early in a long-term financial shift — with fundamentals potentially advancing ahead of valuations before the next major expansion phase.
Image: Shutterstock
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