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, no longer dictates market dynamics. 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
“The forces that created prior four-year cycles are weaker,” Hougan stated on X, emphasizing that halvings—once a catalyst for price surges—have lost 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 Regulatory Progress

Hougan highlighted a 5-10 year timeline for ETF asset migration as a critical driver, alongside broader institutional adoption still in its early stages. 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

While some analysts, like James Seyffart, acknowledge that cycles may persist but with reduced amplitude, Hougan argues that institutional participation inherently stabilizes the market. 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: Sustained Boom Over Super-Cycle

Hougan’s outlook 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.

Looking Ahead

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.

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FAQ

What factors caused the end of the four-year cycle?

• 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

What is the expected timeline for ETF asset migration?

• A 5-10 year timeline is anticipated, with large-scale commitments expected to culminate in 2026.

How does institutional participation affect market stability?

• Institutional participation stabilizes the market by mitigating volatility, reducing the amplitude of fluctuations compared to retail-driven cycles.

What is meant by a "sustained steady boom"?

• A consistent phase of growth driven by institutional investments, offering liquidity and stability without the need for speculative boom cycles.

Crypto Market's Take

At Crypto Market AI, we echo the sentiments of Matt Hougan's analysis on the changing dynamics of the crypto market. Our platform offers advanced tools such as AI-driven crypto trading bots that align with the institutional adoption and regulatory compliance mentioned by Hougan. These bots use sophisticated algorithms for market analysis, providing insights that can aid in navigating a market increasingly driven by fundamentals and institutional strategies. Find out more about our AI Agents and trading resources on our AI Agents page.

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Source: Bitwise CIO Declares Four-Year Crypto Cycle Obsolete Citing Institutional Adoption and Regulatory Advances on July 26, 2025.