Fund CIO Analyzes Potential End of Bitcoin Bear Markets
In a recent note, Matt Hougan, CIO at Bitwise, discussed potential changes to Bitcoin's historical four-year market cycle due to significant shifts in US crypto policy following President Trump's executive order. Key points include:
- The traditional four-year cycle typically features three years of gains followed by a downturn.
- Recent events like the 2022 market deleveraging have led to a new "Mainstream Cycle," starting with Grayscale's legal success over the SEC regarding a spot Bitcoin ETF.
- Bitcoin rose from $22,218 to $102,674 since March 2023, fueled by increased institutional acceptance post-ETF approval in January 2024.
- Trump's executive order designates the US digital asset ecosystem as a national priority and aims for clearer regulatory frameworks.
- This order may lead to significant investments in crypto, potentially surpassing previous expectations driven by ETF inflows.
- Despite risks of leverage and bad actors emerging, Hougan suggests future corrections could be shorter and less severe due to improved infrastructure and diverse investor participation.
- BTC was trading at $105,275 at press time.
