Key Takeaways
- Trump's executive order triggered $1.9 billion in Bitcoin inflows.
- Bitwise CIO predicts Bitcoin's cycle downturns will be shorter and shallower.
- Hougan forecasts Bitcoin reaching $200,000 in 2025 due to institutional adoption.
Matt Hougan, Chief Investment Officer at Bitwise, believes that Bitcoin’s traditional four-year cycle could be significantly altered due to growing institutional interest and regulatory shifts.
While he acknowledges that market cycles still exist, he expects future downturns to be “shorter” and “shallower” than in previous years.
Policy effects
Hougan attributes this shift in part to President Donald Trump’s January 23 executive order, which established a “national digital asset stockpile.”
This move triggered a $1.9 billion influx into Bitcoin, creating what Hougan described as a pathway for Wall Street’s largest banks and investors to enter the market aggressively.
He noted that Bitcoin’s latest cycle began in March 2023, when Grayscale won its legal battle with the SEC over a Bitcoin ETF.
The ETF approvals in January 2024 led to hundreds of billions of dollars flowing into Bitcoin, a trend that could accelerate further with government involvement.
Future outlook
Hougan expects 2025 to be a bullish year, stating:
We’re on the record predicting that Bitcoin’s price will double this year to above $200,000, driven by flows into ETFs and Bitcoin purchases by corporations and governments.
However, he cautioned that excess leverage and speculation could still lead to pullbacks, but he believes these corrections will be less severe than in past cycles due to a more diverse and value-driven investor base.
