The crypto market in 2026 is expecting a future explosion: institutional capital will surpass the four-year cycle

Main Thesis: Bitwise CIO Matt Hougan is convinced that 2026 will be a year of unprecedented growth

Recently, there has been a lot of concern in the crypto market about cyclicality and volatility. However, experts, including Bitwise CIO, say that the picture is much more optimistic. The main reason is the transformation of the sources influencing the market. If previously the market was driven by halving events and macroeconomic cycles, now the dominant force is the influx of institutional capital.

Why the four-year cycle is losing influence

The traditional theory of the four-year Bitcoin cycle was based on several factors: supply shocks from halving, specific macroeconomic environments, and systemic risks. However, these forces have weakened. Interest rates are already in a downward cycle, systemic risks are minimized, and halving itself is no longer enough to significantly impact the market.

Instead, industry leaders, such as CIOs of major firms, point to a new reality: over the past six months, giants like Bank of America, Morgan Stanley, UBS, and Wells Fargo have opened the doors to crypto assets for their clients. The total assets under management by these institutions exceed (15 trillion. This is a force of a decade scale, capable of overshadowing any past cyclical patterns.

Institutional adoption — the main trend

The process of institutional adoption of crypto assets is slow but steady. Bitwise experts are constantly engaging with large financial organizations, and their questions remain basic: how to evaluate Bitcoin? What is its role in a portfolio? What is the correlation with other assets?

It is critically important to understand one point: institutional decisions are made very slowly. A typical client from a large organization conducts about 8 meetings before making a purchase, often spaced out over quarters. That’s why Harvard University is only now expanding its position in Bitcoin — they started research when launching a Bitcoin ETF, and formal approval took a year.

Imagine the scale: Bank of America manages $3.5 trillion in assets. Even if they allocate just 1% to crypto, that’s $35 billion — a huge sum that far exceeds the current net inflows into all Bitcoin ETFs combined.

MicroStrategy and the “myth of forced sales”

Market concerns about a possible forced sale of Bitcoin by MicroStrategy are often heard. However, analysis shows that this is largely a misunderstanding. The company has $14.4 billion in cash, with annual interest payments of about $800 million — enough for the next 18 months. The company’s debt is approximately $8 billion, while the value of Bitcoin in its portfolio exceeds $60 billion. The first debt is due only in 2027.

A forced sale would require Bitcoin’s price to fall by 90%, creating systemic problems for the entire industry. The real question is not whether MicroStrategy will sell, but whether it can buy at the same pace as before. This is the true margin impact.

Hidden sale mechanisms: options strategies

An interesting point often overlooked is that many OG Bitcoin holders haven’t sold directly but exert equivalent market pressure through covered call options)covered calls(. They don’t want to part with Bitcoin due to tax implications but want to earn profits, so they stake their coins and write options, earning 10–20% annual returns.

Essentially, this is a sale of future growth potential, exerting the same price pressure as partial sales but remaining invisible on the chain. According to Bitwise experts, this business is growing rapidly, and the hidden selling pressure from such structures already amounts to tens of billions of dollars.

Short-term volatility vs long-term trend

Recent weekend fluctuations, )so-called “weekend panic”(, are often interpreted as a sign of trouble. However, this is mainly an artifact of market structure: crypto operates 24/7/365, but liquidity drops on weekends. Additionally, important macro announcements are often made on Friday after hours, causing the market to price them in advance.

This year, the market overall remained roughly at the same level, but emotions are exaggerated. This is not a sign of fundamental change but rather a psychological phenomenon.

How institutions evaluate L1 blockchains

When Bitwise CIO talks with large investors about the differences between Ethereum, Solana, and other L1s, the strategy is simple: first highlight differences, then advise diversification. Why? Because on average, an investment advisor has only 5 hours a week for research, with perhaps only 3 minutes dedicated to crypto. In three minutes, it’s impossible to determine a winner, so the logical approach is to buy a little of everything.

Among L1s, the most popular among institutions are Uniswap and Aave)easily explained as a decentralized Coinbase and crypto lending bank respectively(, and Chainlink)as the Bloomberg Terminal for the blockchain world(.

Regarding the valuation of the L1 chains themselves, there is an ongoing debate among experts. One side argues that the market underestimates future transaction volume and network effects. The other emphasizes the need to base valuation on real economic metrics — fees, revenue, protocol captured value. Both approaches are correct: ultimately, valuation will depend on financial indicators, but the future economic scale will far exceed current models.

Return of ICOs and the evolution of tokens

Experts are confident that token issuance will develop anew, and the scale will be much larger than in 2017. ICOs were an “early, but correct” attempt. The idea was right, but the economic model was immature, and regulation was unclear.

Today, token listings have advantages: faster than IPOs, more democratic, cheaper. Moreover, current regulation allows for direct linkage of tokens to the protocol’s economic activity. In the long run, it’s even possible that the way companies list will gradually shift from traditional IPOs to native token issuance or a combination thereof.

How teams should build investor trust

Crypto projects are transitioning from the “pure community narrative” era to a “quasi-public company.” This means teams need to adopt traditional capital market practices:

• Regularly publish transparent operational and financial data
• Hold quarterly update calls
• Create investor relations teams )IR
• Clearly explain revenue, economic model, and long-term vision

Many funds in recent years have raised excessive funding with low efficiency. Future successful projects must manage their treasury as a real investment portfolio, not as a mechanism for short-term subsidies.

Regulatory evolution and private coins

The regulatory environment is constantly changing. Stablecoins, asset tokenization, on-chain finance — these are new narratives gaining momentum. Even projects like Zcash, focused on privacy, will have their place, although currently institutional exposure is hindered by regulatory sensitivity to default privacy features.

Conclusion: 2026 — the threshold of a major cycle

CIO of Bitwise is confident: 2026 will be a very strong year. Institutional inflows are gaining momentum, regulatory environment is shifting from opposition to facilitation, new narratives are spreading. The market may be disappointed in these narratives at certain stages, but that’s only a matter of pace, not direction.

The main idea: we are only at the beginning of the next major growth cycle in the crypto market. The institutional capital just starting to enter will be the force that overcomes past cyclical patterns.