Bitwise CIO Reveals Three Catalysts That Could Propel Crypto to All-Time Highs in 2026

The crypto market's next moonshot might be closer than you think. According to Bitwise's Chief Investment Officer, a specific trio of developments could send digital assets into uncharted territory this year—and traditional finance is scrambling to catch up.

The Regulatory Green Light

Clear frameworks from major economies finally cut through the legal fog. Think streamlined approvals for spot ETFs beyond Bitcoin, not vague promises. When institutions get a predictable playbook, capital floods in—bypassing the old guard's gatekeepers.

Institutional Infrastructure Goes Live

Next-gen custody solutions and seamless trading rails go mainstream. We're talking about systems that handle billions without breaking a sweat, making Wall Street's legacy tech look like a dial-up modem. This isn't about enabling adoption; it's about removing the final excuses.

The Killer App Breaks Through

One decentralized application hits ten million daily active users for something beyond speculation. Maybe it's a global payment network that settles in seconds for pennies, or a digital identity protocol that actually works. Utility drives the next wave—not just hype.

The clock is ticking. If these pieces fall into place, 2026 won't just be another bull run; it'll be the year crypto proves it's here to stay. And the cynical jab? Watching traditional finance finally embrace the very assets it spent a decade dismissing—now that there's a commission to be made.

TLDR

• Bitwise CIO Matt Hougan identifies three requirements for crypto to reach new all-time highs in 2026: stability after October’s $19 billion liquidation event, passage of the CLARITY Act through US Senate, and steady equity markets without major crashes.
• The crypto market has gained $170 billion since the start of 2026, pushing total market cap to $3.3 trillion, a seven-week high.
• The US Senate is targeting January 15 for a markup of the CLARITY Act, which would establish core regulatory principles for crypto in law.
• Bitcoin is currently trading at $90,866, down 2.2% over 24 hours, after markets shed over $1.2 trillion following the October 10 crash.
• The Federal Reserve shows 89% probability of keeping rates unchanged at its January 28 meeting, supporting continued risk-on sentiment for crypto markets.

Crypto markets need to clear three hurdles before reaching new peaks in 2026, according to Bitwise chief investment officer Matt Hougan. The requirements include market stability, regulatory progress, and steady traditional markets.

In 2026…

… $BTC, $ETH, and $SOL will set new all-time highs, bets on @Polymarket will grow significantly, crypto equities will outperform tech stocks, and 7 other crypto predictions for 2026 by the @BitwiseInvest Research Team. 

Please note: As with all predictions, these are…

— Bitwise (@BitwiseInvest) December 17, 2025

Hougan outlined these conditions in a Tuesday note while markets show early signs of recovery. Total crypto market capitalization reached $3.3 trillion on Wednesday, gaining $170 billion since the start of the year.

The first requirement is stability following the October 10 liquidation event. That crash wiped out $19 billion in futures positions in one day and caused over $1.2 trillion in losses across crypto markets.

“Investors worried one of these big players might have to wind down operations,” Hougan wrote. “These potential sales hung over the market like a heavy fog.”

He said investors have now moved past October concerns, which helped fuel the January rally. Markets are down 2% over the past 24 hours but up 5.6% year to date.

Legislative Progress Key to Long-Term Growth

The second checkpoint is passage of the CLARITY Act through the US Senate. The Senate is targeting January 15 for a markup of the bill.

A markup involves aligning drafts between the Senate Banking and Agriculture committees. The final version then moves to a vote.

“Passage of the CLARITY Act is key to the long-term future of crypto in the US,” Hougan said. The bill WOULD establish core regulatory principles into law and provide a foundation for future growth.

White House crypto czar David Sacks previously stated the administration is “closer than ever” to passing the bill. Without legislation, the current pro-crypto regulatory approach could reverse under a new administration.

The third requirement is stability in equity markets. While crypto is not highly correlated with stocks, a sharp collapse would affect all risk assets in the short term.

“The equity market needs to stay stable rather than surging or crashing,” said Ryan Yoon, senior analyst at Tiger Research. He noted that once stability is reached, investors naturally look toward crypto for higher returns.

Federal Reserve Policy Supports Risk Assets

The Federal Reserve is not expected to cut rates at its January 28 meeting. CME futures markets show an 89% probability that rates will remain unchanged.

“This environment supports continued risk-on sentiment in the NEAR term for crypto markets,” said Nick Ruck, director of LVRG Research. He added that the situation highlights growing sensitivity to inflation risks and potential policy pauses.

Jurrien Timmer, director of global macro at Fidelity, said the consensus for 2026 is that the US will pursue expansionary fiscal policy with a dovish Federal Reserve.

Bitcoin is currently trading at $90,866, down from last week’s MOVE beyond $94,000. The price represents a 2.2% decline over 24 hours.

Tim Sun, senior researcher at HashKey Group, expects the short-term trend to be volatile yet strengthening. He cited specific events like the TRUMP administration’s policies and fiscal decisions as drivers.

Medium-term growth will be driven by institutional investment through spot ETFs absorbing long-term capital. This period will favor stronger projects and improve market efficiency.

Yoon noted that for a broad rally, the emergence of a compelling new use case may be necessary. He said older projects are gaining renewed attention as they pivot toward practical utility.

Sun emphasized that maturing regulatory frameworks are key to clear institutional onboarding. This will strengthen Bitcoin’s narrative as an inflation hedge and strategic allocation asset.