Bitwise 2026 Prediction: BTC will break its four-year cycle and reach a new high.

Author: Matt Hougan, Chief Investment Officer, Bitwise; Translated by: Jinse Finance

Bitwise will release its annual "Top Ten Predictions" report tomorrow, offering our best predictions for trends in 2026.

I won't reveal the full details—it contains some interesting and surprising viewpoints—but I want to give my loyal readers a sneak peek at three particularly important predictions.

Prediction 1: Bitcoin will break its four-year cycle and reach a new all-time high.

Bitcoin's historical price movement follows a four-year cycle, with significant gains in the first three years followed by a sharp correction in the last year. Based on this cycle, 2026 should be the year of correction.

We believe this will not happen.

We believe that the factors that have driven the four-year cycles in the past—Bitcoin halvings, interest rate cycles, and the boom-bust cycles driven by cryptocurrency leverage—are significantly weaker than in previous cycles. Halving: By definition, each Bitcoin halving is half the importance of the previous halving. Interest Rates: Interest rates rose sharply in 2018 and 2022, impacting prices; we expect interest rates to decline in 2026. Crisis Outbreak: Relatively lower leverage (following a record liquidation in October 2025) and improved regulation reduce the likelihood of a major crisis. More importantly, we believe the influx of institutional capital into the cryptocurrency space since the approval of spot Bitcoin ETFs in 2024 will accelerate in 2026 as platforms like Morgan Stanley, Wells Fargo, and Merrill Lynch begin allocating Bitcoin. Meanwhile, we expect cryptocurrencies to begin benefiting from a positive shift in regulatory policy following the 2024 election, as Wall Street and fintech companies begin to seriously adopt them. We anticipate that the combined effect of these factors will drive Bitcoin to a new all-time high, sweeping the four-year cycle into the dustbin of history. Prediction Two: Bitcoin's Volatility Will Be Lower Than Nvidia's If you've been in the cryptocurrency space long enough, you've probably heard someone say, "I would never invest in something as volatile as Bitcoin." We've heard this countless times. It's one of the most common criticisms from Bitcoin skeptics. Is Bitcoin volatile? Absolutely. We don't deny that. But is Bitcoin's volatility really greater than other assets that investors flock to? Not recently. Throughout 2025, Bitcoin's volatility will be lower than one of the most popular stocks on the market: Nvidia. Looking further, you'll find that Bitcoin's volatility has been steadily declining over the past decade. This shift reflects the fundamentally reduced risk of Bitcoin as an investment and the diversification of the investor base brought about by traditional investment tools such as ETFs. We expect this trend to continue until 2026. Volatility: Bitcoin vs. Nvidia 1-Year Rolling Annualized Volatility Source: Bitwise Asset Management, data from Bloomberg. Data range: December 31, 2019 to December 5, 2025. Note: Gold underwent a similar shift after the US abandoned the gold standard and subsequently launched gold ETFs in 2004. We explored these similarities in depth in our recent paper, "The Long-Term Capital Market Hypothesis of Bitcoin." Prediction 3: Bitcoin's Correlation with Stocks Will Decline. Many people—especially in the media—like to say that Bitcoin is highly correlated with the stock market. Data shows this is not the case. Using rolling 90-day correlation data, Bitcoin's correlation with the S&P 500 rarely exceeds 0.50, and 0.50 is generally the statistical dividing line between "low" and "moderate" correlation. Regardless, we believe that Bitcoin's correlation with stocks will be lower in 2026 than in 2025. Why? We expect that factors unique to cryptocurrencies, such as regulatory progress and institutional adoption, will drive up cryptocurrency prices, even as the stock market struggles due to valuation and short-term economic growth concerns.

Conclusion

Combining these three predictions brings investors a triple benefit:

• Strong returns

• Reduced volatility

• Reduced correlation

Sounds pretty good as a portfolio asset, doesn't it? I estimate that as these events unfold, we will see institutional investors inject tens of billions of dollars of new money.

Finally, I think 2026 will be a very good year.