Bitwise CIO says Trump’s crypto directive could impact Bitcoin’s four-year cycle

Bitwise chief investment officer (CIO) Matt Hougan suggests that US President Donald Trump’s recent executive order for crypto could lead to the market breaking its usual boom and bust 4-year cycle that has been observed over the last decade.

“Last week, President Trump issued an executive order that was so overwhelmingly bullish for the space that it’s making me wonder,” Hougan said in a Jan. 29 research note referring to the potential positive impact the executive order will have on the crypto market.

Bitwise CIO warns of “excess” in the crypto market

Hougan warned that he sees “early signs of excess” in the crypto market, and noted the numerous companies who are all using debt to raise capital for Bitcoin purchases. He added in the research note that there is nothing wrong with this approach, but did say that it introduces leverage into the market.

While the growing leverage in the crypto market suggests the 4-year cycle is intact, Hougan argued that the Jan. 23 executive order signed by US President Trump to make digital assets a “national priority” could lead to the market deviating from its traditional trend.

Mainstream adoption: a new era for crypto world

Hougan suggested that the recent executive order signed in The Oval Office by Trump is a turning point that he believes could lead to ‘the full mainstreaming of crypto’. 

There are also policy changes at the Securities and Exchange Commission (SEC), which opted for a regulation by enforcement approach to regulate the nascent digital asset sector. However, anti-crypto Chair Gary Gensler stepped down from his influential position on Jan. 20.

Since Gensler’s resignation from the SEC, there have been a series of bullish developments at the agency that could have a positive effect on the crypto market. Most notably, the SEC repealed Staff Accounting Bulletin 121 (SAB 121), a controversial accounting guideline that previously restricted banks from holding crypto. These restrictions were mainly due to the fact that the accounting ruled required firms holding crypto to declare these assets as liabilities, 

This recent repeal has removed a major barrier to entry into the crypto market for leading Wall Street firms, which could potentially drive trillions of dollars into the market, the Bitwise CIO speculated. 

Bitcoin cycle under threat?

The crypto market has undergone its fair share of steep corrections over the years, with notable bear markets occurring back in 2014, 2018, and 2022, following the industry-wide collapses of then-leading crypto companies such as Mt. Gox, Three Arrows Capital, FTX, and BlockFi. However, like clockwork, these collapses were followed by bull runs that led to crypto prices rallying to new all-time highs (ATHs), with BTC leading all of the market rebounds and going on to set new price peaks every time..

Should the market’s cyclical pattern continue, Hougan warned in the research note that the next drop will happen around 2026. However, the Bitwise CIO claims that the increased institutional participation and better regulatory clarity will mitigate the effects of future pullbacks, which means any corrections will be of a much smaller magnitude compared to previous market drops. “I expect volatility, but I’m not sure I’d bet against crypto in 2026,” he said in the report.

Bitwise CIO maintains $200k BTC price target for 2025 year-end

Hougan remains positive on the long-term prospects of Bitcoin, the largest crypto by market cap, and retains a $200,000 price target for BTC by the end of this year, regardless of whether the US establishes a strategic Bitcoin reserve or not. 

Though the impacts of Trump’s crypto policy may not be immediate, the hiring of White House crypto and AI czar David Sacks, who is also the former chief operating officer (COO) of PayPal, points to incoming regulatory clarification in the US. Meanwhile, Wall Street’s largest corporations will require time to adjust their strategies and accept crypto as a mainstream asset class, Hougan said in the report.

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