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Bitwise Predicts Crypto Recovery Driven by Four Key Catalysts in 2026
Bitwise Asset Management identifies a potential cyclical low in the crypto market, with weak prices but strong on-chain and business fundamentals, reminiscent of Q1 2023 before a significant rally.
- In Q4 2025, Ethereum fell 29%, while its transactions hit record highs, rising by 24.5%.
- Crypto equities dropped 20%, yet revenues of these companies are growing three times faster than other stock sectors.
- The Bitwise 10 Large Cap Crypto Index decreased by 26.29% in Q4, ending the year down 10.64%. Bitcoin declined 23.48%, and Ethereum dropped 28.59% in Q4.
- Total crypto market cap was approximately $2.78 trillion as of December 31, with Bitcoin at 63.6% and Ethereum at 12.9% of the market.
- Stablecoin assets under management and transactions reached new highs, indicating ongoing adoption.
Four Catalysts for 2026
- US Market-Structure Legislation: The CLARITY Act could form a solid regulatory base but also presents risks if not passed.
- Stablecoin Supercycle: Stablecoin transaction volume exceeded $32 trillion in 2025, surpassing Visa’s volume, marking their mainstream presence.
- Federal Reserve Changes: Jerome Powell's upcoming departure allows potential dovish leadership appointments, possibly leading to rate cuts and higher crypto asset values.
- Distribution on Wealth Platforms: With crypto ETFs now accessible to advisors controlling ~$16 trillion, early ETF flows might accelerate.
Matt Hougan emphasizes the importance of underlying data staying strong to support the bottom thesis. As of the report's drafting, early-year returns were positive. The total crypto market cap has since increased to $3.00 trillion.
