Amid the notable decline in the crypto market, particularly for bitcoin (BTC), Matt Hougan, the CIO of Bitwise, has highlighted several reasons why he believes the four-year crypto cycle is weakening.
In a recent X post, Hougan cited weaker halving impact alongside stronger long-term barriers, such as institutional adoption, post-GENIUS Act investment, and exchange-traded funds (ETFs), as potential barriers.
Shifting Macroeconomics Challenge Crypto’s Cycle
According to the platform’s executive, the crypto market has followed a familiar four-year cycle for years. Bitcoin halvings, speculative booms, painful losses, and eventual recovery mark this duration.
However, as the crypto industry enhances and macroeconomic forces shift, that once-reliable pattern may no longer hold. Due to emerging market perspectives, the four-year cycle’s relevance is rapidly diminishing, and long-term structural changes are driving a new era for digital assets.
Hougan emphasized that Bitcoin’s halving mainly drove the crypto cycle. The event happens every four years, cutting the number of new bitcoins created by half. This reduces supply and has often led to price increases in the past.
However, each halving event becomes progressively less significant, according to Bitwise’s CIO. In 2024, the latest halving cut new issuance by far fewer BTC compared to previous events, making its market impact smaller.
Traditional Finance Embraces Digital Assets
Meanwhile, macroeconomic factors that once dampened the crypto market are now working in its favor. Unlike the tightening cycles of 2018 and 2022, today’s interest rate environment is showing signs of weakness. With traditional cycle forces fading and long-term building, 2026 could mark the continuation of a new structural trend in crypto’s evolution, driven by foundational adoption.
Over the years, regulatory uncertainty has led to failures. This rises from exchange collapses to on-chain blowups. However, the risk of major crashes has significantly decreased due to regulatory clarity and the growing presence of institutional-grade infrastructure.
Hougan also stated that the emergence of spot Bitcoin and Ethereum ETFs in 2024 marks the beginning of a multi-decade financial trend. Assets are expected to migrate into these vehicles steadily over the next 5 to 10 years, providing sustained demand not seen in previous cycles.
At the same time, traditional finance is deepening its commitment to the crypto space. Major banks, asset managers, and institutional allocators, including pensions, are starting to enter the market. Wall Street, once skeptical, is now exploring crypto and deploying capital.
Ephraim Emmanuel | August 22, 2026
