Bitwise CIO Declares Four-Year Crypto Cycle Obsolete Amid Institutional Adoption and Regulatory Advances

Bitwise Asset Management’s Chief Investment Officer, Matt Hougan, has declared the traditional four-year cryptocurrency cycle obsolete, signaling a transformative phase for the industry driven by institutional adoption and regulatory advancements. The four-year pattern, historically tied to Bitcoin’s halving events and retail-driven speculation, is no longer dictating market dynamics, according to Hougan. Instead, long-term trends such as ETF inflows, institutional infrastructure investment, and evolving macroeconomic conditions are reshaping the sector’s trajectory.

The End of the Four-Year Cycle

Hougan attributes the collapse of the old cycle to three key factors:

• The diminishing significance of Bitcoin halvings
• The shift to a positive interest rate environment for crypto
• Reduced systemic risks due to improved regulation and institutional safeguards
He emphasized on social media that the forces which created prior four-year cycles are weaker today. Halvings—once a catalyst for price surges—have lost their predictive power over time. With central banks adopting more crypto-friendly policies and institutional players deploying multi-year strategies, the market is now governed by fundamentals rather than short-term speculative waves.

Institutional Adoption and ETF Inflows

A critical driver of this shift is the 5-10 year timeline for ETF asset migration, alongside broader institutional adoption which is still in its early stages. Hougan noted that pension funds and endowments are only beginning to evaluate crypto allocations, a process expected to culminate in 2026 with large-scale commitments. Regulatory progress, particularly following the GENIUS Act, is accelerating Wall Street’s investment in crypto infrastructure. Hougan predicts "record flows" in both 2025 and 2026 as due diligence concludes.

Market Stability Through Institutional Participation

Some analysts, like James Seyffart, acknowledge that cycles may persist but with reduced amplitude. Seyffart noted that institutional “force buyers” could temper volatility, potentially limiting pullbacks to 50% rather than the historical 80% seen in retail-dominated cycles. This shift underscores a maturing asset class where compliance-heavy onboarding—evidenced by 650-page compliance packages and multi-visit evaluations—has normalized crypto as a strategic investment.

A New Era for Crypto Markets

Hougan envisions a “sustained steady boom” rather than a super-cycle, with institutional flows providing liquidity and stability. This aligns with broader trends in traditional finance, where crypto is increasingly treated as a core asset rather than a speculative outlier. As corporate treasuries and pension funds integrate crypto into their portfolios, the market’s reliance on retail sentiment is diminishing.

Outlook and Industry Developments

Hougan’s thesis is reinforced by current industry developments, including record Bitcoin ETF inflows and growing infrastructure investment. These trends suggest crypto’s next phase will be defined by integration with traditional financial systems, rather than isolated speculative cycles. While volatility may persist, the market’s new institutional-driven structure offers a counterbalance, fostering resilience and scalability. Source: Bitwise CIO Declares Four-Year Crypto Cycle Obsolete

Frequently Asked Questions

What does Matt Hougan mean by the end of the four-year cycle?

Matt Hougan suggests that the traditional Bitcoin market cycles, driven by halving events and retail speculation, are now obsolete. The industry is transitioning towards a sustained phase influenced by institutional investment and regulatory improvements.

How are institutional inflows impacting the crypto market?

Institutional inflows are contributing to market stability and long-term investment strategies. They temper volatility, provide liquidity, and are expected to bring "record flows" due to regulatory advancements and the integration of crypto in traditional finance.

What role does regulation play in the new market phase?

Regulatory advancements reduce systemic risks and support institutional investments. Compliance with regulations is helping to establish crypto as a strategic investment rather than a speculative asset.

Crypto Market's Take

At Crypto Market AI, we align with the industry's shift towards robust institutional frameworks. Our platform offers AI-powered trading bots designed for the evolving market landscape, ensuring our users can capitalize on new opportunities with reduced volatility. Additionally, our regulatory compliance efforts span global jurisdictions, providing users with a secure and compliant trading environment.

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