Crypto asset manager Bitwise believes Bitcoin has the potential to reach a new all-time high in 2026 and break away from the four-year cycle that has long guided market expectations.

This outlook was presented in the report Bitwise Predictions for 2026: The Four-Year Cycle Is Dead, released on Tuesday, December 16, 2025. Bitwise Chief Investment Officer Matt Hougan argued that structural changes in the market have rendered traditional assumptions about Bitcoin’s cycle increasingly obsolete. According to him, a new set of dynamics is likely to shape Bitcoin’s performance in 2026.

Historically, Bitcoin has followed a four-year cycle characterized by three years of rising prices followed by one year of sharp correction. Based on that framework, 2026 would typically be expected to mark a downturn.

However, Bitwise sees this outcome as unlikely. Hougan explained that the key drivers behind the four-year cycle have weakened over time. The supply impact of halving events has diminished, while global interest rate cycles are expected to be more accommodative than in 2018 and 2022, periods that weighed heavily on risk assets.

The risk of major disruption in the crypto market is also seen as declining. Following record-breaking liquidations in October 2025, overall market leverage has become more restrained. At the same time, clearer regulatory frameworks have reduced the likelihood of large-scale crises similar to those seen in previous cycles.

Taken together, these factors lead Bitwise to project that Bitcoin could continue its upward trend and potentially set a new price record in 2026.

Bitwise also highlighted a shift in Bitcoin’s volatility profile. Historically, high volatility has been one of the primary reasons investors remained cautious about the asset.

Recent data, however, tells a different story. Throughout 2025, Bitcoin’s volatility was lower than that of Nvidia shares, one of the most actively traded technology stocks. Over the long term, Bitcoin’s volatility has shown a steady downward trend over the past decade.

Hougan views this decline as evidence of Bitcoin’s gradual derisking as an investment asset. The introduction of spot Bitcoin ETFs has broadened the investor base, reduced short-term speculative dominance, and contributed to more stable price movements. Bitwise expects this trend to persist into 2026.

The firm also drew parallels with gold, which experienced a significant drop in volatility after the end of the U.S. gold standard and the launch of gold ETFs in 2004.

Beyond volatility, Bitwise anticipates that Bitcoin’s correlation with the U.S. equity market will continue to weaken. Hougan noted that the perception of Bitcoin being tightly linked to stocks is not strongly supported by historical data.

Based on rolling 90-day correlations, Bitcoin’s relationship with the S&P 500 has rarely exceeded 0.50, a level generally considered the threshold between low and moderate correlation. Looking ahead, Bitwise expects crypto-specific factors to play a more dominant role in driving Bitcoin’s price.

Regulatory progress, rising institutional adoption, and deeper engagement from Wall Street and fintech companies are expected to influence Bitcoin independently of equity market dynamics, which are facing valuation pressures and short-term economic slowdown.

With a combination of attractive return potential, reduced volatility, and diminishing correlation with traditional assets, Bitwise believes Bitcoin is becoming increasingly appealing as a long-term portfolio asset. Hougan estimates that these conditions could attract tens of billions of U.S. dollars in new institutional inflows and position 2026 as a pivotal stage in Bitcoin’s evolution within the global financial system.