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Author:Matt Hougan, Chief Investment Officer of Bitwise; Compiled by: BitChain Vision
Bitwise will release its annual “Top Ten Predictions” report tomorrow, making our best predictions for 2026 trends.
I won’t give it all away – it contains some interesting and surprising points – but I wanted to give my loyal readers a heads up on three particularly important predictions.
Prediction 1: Bitcoin will break the four-year cycle and hit a new all-time high
The historical trend of Bitcoin shows a four-year cycle, with a sharp rise in the first three years and a sharp correction in the next year.According to this cycle, 2026 should be the year of the correction.
We don’t think this will happen.
We think,The factors that drove four-year cycles in the past—the Bitcoin halving, interest rate cycles, and cryptocurrency leverage-driven booms and busts—have been significantly weaker than in previous cycles..
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Halvings: By definition, each Bitcoin halving is half as important as the previous one.
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Interest rates: Interest rates rose sharply in 2018 and 2022, impacting prices; we expect interest rates to fall in 2026.
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Crisis Outbreak: A relative fall in leverage (following record liquidations in October 2025) and improved regulation reduce the likelihood of a major crisis.
More importantly, we believe that the wave of institutional capital that has poured into the cryptocurrency space since the approval of the spot Bitcoin ETF in 2024 will accelerate in 2026 as platforms such as Morgan Stanley, Wells Fargo, and Merrill Lynch begin to allocate Bitcoin.At the same time, we expect that cryptocurrencies will also begin to benefit from a favorable shift in regulatory policy following the 2024 election as Wall Street and fintech companies begin to adopt cryptocurrencies in earnest.
We expect the combination of these factors to push Bitcoin to new all-time highs and sweep the four-year cycle into the dustbin of history.
Prediction 2: Bitcoin will be less volatile than Nvidia
If you’ve been around 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 statement countless times.This is one of the most common criticisms leveled by Bitcoin skeptics.
Is Bitcoin volatile?certainly.We do not deny this.
But is Bitcoin really more volatile than other assets investors flock to?Not recently.
Throughout 2025, Bitcoin has been less volatile than one of the most popular stocks on the market: Nvidia.Look further and you’ll see that Bitcoin’s volatility has continued to decline over the past decade.This shift reflects the fundamental reduced risk of Bitcoin as an investment, as well as the diversification of the investor base brought by traditional investment vehicles such as ETFs.
We expect this trend to continue into 2026.
Volatility: Bitcoin vs. Nvidia
1-year rolling annualized volatility
Data source: Bitwise Asset Management, data from Bloomberg.The data time range is from December 31, 2019 to December 5, 2025.
Note: Gold underwent a similar transformation after the U.S. left the gold standard and the subsequent launch of gold ETFs in 2004.We explore the similarities of these trends in depth in our recent paper, “Bitcoin’s Long-Term Capital Market Hypothesis.”
Prediction 3: Bitcoin’s correlation with stocks will decrease
A lot of people—especially people in the media—like to say that Bitcoin is highly correlated with the stock market.
The data shows otherwise.Using rolling 90-day correlation data, Bitcoin’s correlation with the S&P 500 rarely exceeds 0.50, with 0.50 typically being the statistical cutoff that distinguishes “low” correlation from “moderate” correlation.
Regardless, we believe Bitcoin’s correlation with stocks will be lower in 2026 than in 2025.Why?We expect crypto-specific factors such as regulatory developments and institutional adoption to drive cryptocurrency prices higher, even as stock markets struggle with valuations and near-term economic growth concerns.
Conclusion
If you combine these three predictions, it equals a triple benefit for investors:
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strong returns
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Volatility reduced
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Decreased relevance
Sounds pretty good as a portfolio asset, doesn’t it?I estimate that as these events progress, we will see tens of billions of dollars of new capital being invested by institutional investors.
Finally, I think 2026 will be a very good year.
