Bitwise Reveals 3 Major Hurdles Crypto Must Clear Before Shattering Its All-Time High

Forget the moon—crypto's next giant leap needs to clear three towering obstacles first. Bitwise Asset Management just mapped the route, and it's not for the faint of heart.

The Regulatory Gauntlet

Global watchdogs are still drawing battle lines. Clear rules? More like a patchwork of conflicting decrees that leave institutions hesitating on the sidelines. Until major economies sync their playbooks, trillions in traditional capital will keep treating crypto like a risky side bet—the kind that makes compliance officers break out in a cold sweat.

Infrastructure Growing Pains

Scaling isn't just a tech problem; it's an adoption choke point. Networks must handle Visa-level traffic without buckling or becoming prohibitively expensive for everyday use. The promise of decentralized finance means little if swapping a token costs more than the token itself. Builders are racing, but the finish line keeps moving.

The Narrative Reset

Crypto needs a new story. The wild-west, get-rich-quick era is a liability now. The sector must rebrand as the inevitable engine for a new financial system—transparent, programmable, and open. That means showcasing utility over speculation, a task harder than explaining a Merkle tree to a congressional committee.

Overcoming these hurdles won't be a smooth ride. It'll demand relentless building, shrewd diplomacy, and a stomach for volatility that would give a Wall Street quant nightmares. But the payoff? Unlocking the next chapter—where digital assets move from the fringe to the core of global finance. Just don't expect the old guard to cheer; they're too busy protecting their margins.

In Brief

• The crypto market restarts after the October 10 storm and its massive liquidations.
• The CLARITY Act in the United States could permanently anchor crypto sector regulation.
• Stock market stability is essential to support confidence in crypto assets.
• Bitwise identifies three key obstacles to overcome before hoping for new highs in 2026.

A Trauma Behind Us? The Crypto Market Finally Breathes

On October 10, 2025, the crypto ecosystem experienced a historic shock. In 24 hours, $19 billion worth of futures positions were liquidated. This shock froze hopes of a recovery and sparked fears of a systemic bankruptcy of major players.

Matt Hougan looks back on this episode with clarity:

One of the reasons the crypto struggled to rebound in the fourth quarter was that investors feared that one of these big players might be forced to cease operations, a process that usually involves forced asset sales. These potential sales loomed over the market like a thick fog.

But early 2026 has clearly changed the game. Bitcoin and ethereum rise by 7%, Dogecoin soars by 29%. The mood eases in the crypto sphere. The fears of massive liquidation? Largely dissipated. If a company were going to fold, it would have done so before the end of 2025. That is largely why the market is restarting: investors have put the October trauma behind them.

First obstacle overcome. Confidence returns to the crypto community.

The CLARITY Act: American Crypto at the Legislative Wall

Second issue: regulation in the United States. The CLARITY Act is a fundamental bill to set clear rules on cryptos. It covers DeFi, stablecoins, and conflicts of interest. The Senate plans to review the text on January 15.

But the process remains complex. The Banking and Agriculture committees still need to harmonize their versions. The political climate remains polarized. Yet, without this text, the regulatory stability of cryptos in the USA remains precarious. In case of a political shift, everything could change.

David Sacks, WHITE House crypto advisor, is confident: the United States is “closer than ever” to passing the law. On the predictive markets side, the chances of a vote are evaluated at 46% by May, 82% by the end of the year.

An “orange” signal, then. The crypto sector is watching every development of the text, because a clear law could unlock massive institutional investor inflows.

Wall Street, the Silent Arbiter of Destiny 

The third condition pointed out by Bitwise: the strength of the stock markets. Although crypto evolves independently, a Wall Street crash WOULD sharply impact the perception of overall risk.

Experts agree: no need for a bull stock market, but avoiding a 20% drop in the S&P 500 is essential. Currently, the probabilities of a positive scenario are high: predictive markets give an 80% chance of a stock rise in 2026.

However, concerns remain: potential bubbles on AI, geopolitical tensions, persistent inflation. Matt Hougan remains cautious: he does not make predictions about stocks but knows a collapse would break the momentum.

Stability does not mean euphoria but confidence. For crypto, Wall Street plays the role of catalyst or brake, even silently.

TO REMEMBER: 5 Key Facts to Understand the 2026 Stakes

• On October 10, 2025, $19 billion were liquidated on crypto futures markets;
• The CLARITY Act, a crucial project in the United States, will be examined by the Senate as early as January 15;
• The crypto market capitalization is $3,201 billion at the start of 2026;
• Kalshi estimates an 82% chance that the CLARITY Act will pass by the end of 2026;
• The S&P 500 has an 80% chance of rising this year.

2026 starts on a hopeful note for the crypto industry. But three signals must align: post-crisis calming, regulatory clarity in the United States, and stock market stability. If these conditions are met, some analysts believe Bitcoin could even double in value this year. An exciting promise but one that requires caution and clarity.

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