Author: Matt Hougan, Chief Investment Officer, Bitwise; Translated by: Jinse Finance
Bitwise will release its annual "Top 10 Predictions" report tomorrow, offering our best predictions for trends in 2026.
I won't reveal the whole story—it contains some interesting and surprising viewpoints—but I want my loyal readers to get 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 increases in the first three years followed by a sharp correction in the last year. Based on this cycle, 2026 should be a 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 cryptocurrency leveraged booms and busts—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 ratios (following record liquidations in October 2025) and improved regulation have reduced the likelihood of a major crisis.
More importantly, we believe that the wave of institutional capital flowing into the cryptocurrency sector since the approval of spot Bitcoin ETFs in 2024 will accelerate in 2026, as platforms such as Morgan Stanley, Wells Fargo, and Merrill Lynch begin allocating Bitcoin. At the same time, we expect cryptocurrencies to begin benefiting from a favorable shift in regulatory policy following the 2024 election, as Wall Street and fintech companies begin to seriously adopt them.
We expect the combined effect of these factors to drive Bitcoin to a new all-time high and sweep the four-year cycle into the dustbin of history.
Prediction 2: Bitcoin's volatility will be lower than Nvidia's.
If you've been in the cryptocurrency space long enough, you've probably heard people say, "I would never invest in something as volatile as Bitcoin." We've heard this statement 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 really more volatile than other assets that investors flock to? Not recently.
Throughout 2025, Bitcoin's volatility was lower than that of one of the most popular stocks on the market: Nvidia. Further observation reveals that Bitcoin's volatility has been declining steadily over the past decade. This shift reflects the fundamental reduction in the risk of Bitcoin as an investment, as well as the diversification of the investor base brought about by traditional investment vehicles such as ETFs.
We expect this trend to continue until 2026.
Volatility: Bitcoin vs. Nvidia
1-year rolling annualized volatility
Data source: Bitwise Asset Management, data from Bloomberg. Data period: December 31, 2019 to December 5, 2025.
Note: Gold underwent a similar transformation after the United States abandoned the gold standard and subsequently launched gold ETFs in 2004. We explored the similarities of these trends in depth in our recent paper, "The Long-Term Capital Market Hypothesis of Bitcoin."
Prediction 3: The correlation between Bitcoin and stocks will decrease.
Many people—especially those in the media—like to say that Bitcoin is highly correlated with the stock market.
Data shows otherwise. Using rolling 90-day correlation data, the correlation between Bitcoin and the S&P 500 rarely exceeds 0.50, and 0.50 is generally the statistical dividing line between “low” and “medium” correlation.
Regardless, we believe the correlation between Bitcoin and stocks will be lower in 2026 than in 2025. Why? We expect factors unique to cryptocurrencies, such as regulatory developments and institutional adoption, to drive up cryptocurrency prices, even as the stock market struggles due to valuation concerns and short-term economic growth worries.
in conclusion
Combining these three predictions would bring triple benefits to investors:
Strong returns
Reduced volatility
Decreased 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.
