Jan 9, 2026
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Bitwise CIO Identifies Key Factors for Sustained 2026 Crypto Recovery
The cryptocurrency market recently saw a brief uptick but has returned to volatility, with Bitcoin and other major crypto assets retracting earlier gains.
Key Hurdles for Crypto Recovery
- Avoid Market Disasters: Matt Hougan of Bitwise highlights the need to avoid events like the October 10, 2025 liquidation that wiped out $19 billion in futures positions. Such events could undermine investor confidence and force major players to liquidate assets.
- Legislative Support: The passage of the CLARITY Act is crucial. This bill aims to establish a clear regulatory framework for cryptocurrencies in the U.S., ensuring long-term viability and preventing shifts in regulatory stances under future administrations.
- Market Stability: Maintaining broader equity market stability is essential. A significant downturn, like a 20% drop in the S&P 500, could negatively impact enthusiasm for risk assets, including digital currencies.
Hougan notes concerns about a potential AI bubble but points out that prediction markets currently suggest a low probability of recession in 2026 and an 80% chance of S&P 500 gains.
