As the market rally continues, Bitwise’s CIO has outlined some of the bullish catalysts that he believes the market is overlooking and could send the crypto market prices substantially higher in the coming months and years.
Hougan highlighted that there’s “a lot to be excited about” now, including crypto regulation and legislation moving in a positive direction, stablecoins gaining momentum, corporate crypto purchases soaring, exchange-traded funds (ETFs) experiencing remarkable adoption, and the “much-needed altcoin energy” being injected into the broader crypto market by Ethereum’s (ETH) rally.
Hougan listed governments potentially purchasing Bitcoin (BTC) as the first key catalyst not priced in. He explained that “The Three Horsemen of Bitcoin Demand” for this year were ETFs, corporations, and governments, but only the first two have delivered.
In the memo, Hougan affirmed that, based on the conversations he is having at Bitwise, countries and central banks “are moving,” albeit slowly, clarifying that he doesn’t believe “there will be a rush of national announcements by year-end,” but suspects there will be enough to “establish this as a major potential catalyst for 2026. That realization alone could push prices substantially higher.”
Bitcoin trading near all-time highs while interest rates hover near historical highs is unusual, the Bitwise CIO said when discussing the second factor. Despite investors having priced in multiple rate cuts by year’s end, he asserted that the market is missing a much bigger story.
Hougan also underscored the diminishing volatility trend as a third potential catalyst, as both BTC’s volatility and the rate at which its volatility is changing have fallen dramatically since the launch of spot Bitcoin ETFs in January 2024.
The growth of ETFs and corporate purchases injected new types of buyers into the crypto market, and advances on the regulatory and legislative side dramatically reduced risk in the market. I suspect this is the “new normal” for bitcoin. It is now roughly as volatile as high-volatility tech stocks, like Nvidia.
Lastly, he suggested that a comeback of Initial Coin Offerings (ICOs) could be around the corner, bringing a wave of new capital. Hougan argued that ICOs have had a terrible reputation since 2018, which led most investors and observers to write them off “as damaged goods.”
“Markets don’t rise on good news. They rise on good news that is not priced in,” he affirmed, concluding that “the market in general underappreciates the scale of the bull market taking place in crypto. But I also think it’s overlooking some specific catalysts that will play out in the months and years to come.”
