According to Bitwise CIO Matt Hougan, the traditional four-year Bitcoin cycle is evolving into a “10-year grind,” focused on stable returns instead of dramatic spikes.
During his appearance on CNBC’s Crypto World, Hougan suggested that institutional adoption, regulatory advancements, and growth in stablecoins are more significant influences than past cycles driven by halvings.
“I believe the four-year cycle holds less significance now than it did previously,” stated Hougan. “I anticipate the market will rise in the coming year. We are entering a decade of slow, steady growth with strong returns but lower volatility, experiencing some fluctuations along the way.”
Institutional buying reduces Bitcoin volatility
Hougan highlighted the decline in Bitcoin (BTC) volatility as an indicator of structural changes within the market. He pointed out that Bitcoin now shows lower volatility than NVIDIA over the past year.
Institutional investors tend to rebalance their portfolios in a mechanical manner rather than reacting to market momentum, which acts as a stabilizing force lacking in retail-driven markets.
“Retail investors typically follow momentum trends. If prices are rising, they buy; if they fall, they sell,” Bea explained. “Institutions, on the other hand, have strategies built into their plans that dictate the opposite approach.”
The gradual shift from retail to institutional ownership continues. While retail investors are selling off, institutions like Harvard’s endowment are purchasing, resulting in what Hougan described as a “staircase up and then an elevator down” scenario.
The reason Bitcoin has only decreased by 30% rather than 60% from its October peaks is due to “consistent, slow-moving institutional buying that maintains market stability,” he remarked.
Regulatory clarity offers a temporary advantage
Hougan described the influence of the Trump administration as a singular event that alleviated regulatory apprehensions.
“When asked why they avoided investing in Bitcoin in past years, institutional investors cited regulatory concerns as the primary issue, not volatility or valuation,” he noted.
Both executives emphasized the importance of clarity in legislation for crypto market rallies. “Without regulatory clarity, it will be challenging for the crypto sector to rally,” Hougan cautioned. “However, if such clarity is achieved, it may signal the all-clear for this market pullback.”
