Bitwise CIO says Trump's crypto executive order could challenge the four-year cycle

Bitwise Chief Investment Officer Matt Hougan said President Donald Trump’s recent crypto executive order makes the case for breaking the much-touted four-year market cycle.

“If we were following the classic four-year cycle, 2025 would be a great year for crypto,” Hougan wrote in a note to clients on Wednesday. “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. That may turn out to be conservative.”

However, the Bitwise CIO also warned of early signs of excess, with a large number of companies now raising capital and debt to buy bitcoin and a rise in lending programs allowing holders to tap into their bitcoin wealth without selling the underlying asset. Growth in derivatives contracts and levered exchange-traded funds are also signs of things heating up, he highlighted.

Normally, Hougan said this would make him confident that the traditional four-year cycle is intact. However, Trump's crypto executive order established a task force to explore a strategic digital asset reserve in the U.S. — a move so “overwhelmingly bullish” for the space, in Hougan’s words, that he’s beginning to reconsider.

The executive order called it a “national priority” to grow the digital asset ecosystem in the U.S., Hougan noted, laying out the path for a clear regulatory framework for crypto.

“The launch of ETFs was a big enough event to bring hundreds of billions of dollars into the crypto ecosystem from new investors,” Hougan said. “But the full mainstreaming of crypto—the one contemplated by Trump’s executive order, where banks custody crypto alongside other assets, stablecoins are integrated broadly into the global payments ecosystem, and the largest institutions establish positions in crypto—I’m convinced will bring trillions.”

The four-year cycle

Bitcoin has historically moved in a four-year cycle, with three big up years followed by a pullback of between 58% and 74% the following year, Hougan noted.

“True to form, it had a great 2023 and 2024,” Hougan wrote. “According to this model, 2025 should be great as well, and that’s what I expect. But it’s natural for investors to start wondering if the markets are in for a reset in 2026.”

The crypto four-year cycle mirrors traditional economic booms and busts, amplified by catalysts like the launch of exchanges in 2011, Mt. Gox’s collapse in 2014 and the SEC’s ICO crackdown in 2018. While some link it to Bitcoin’s quadrennial halving, the real driver is market psychology and speculation, Hougan said.

The current "mainstream cycle," as Hougan describes it, was born out of the 2022 crypto collapse of firms like FTX, Three Arrows Capital, and Celsius and ignited on March 10, 2023, when Grayscale won the opening argument in its legal case against the Securities and Exchange Commission, signaling the arrival of spot Bitcoin ETFs. Their January 2024 launch brought institutional investors, pushing bitcoin from around $22,000 to over $100,000 within a year, marking the beginning of crypto’s mainstream era, he said.

‘The crypto train is leaving the station’

The biggest challenge ahead is timing, in Hougan’s view. While the executive order and shifting dynamics in Washington are undeniably bullish for crypto, their full impact will take years, not months, to unfold, he said.

If it’s not until 2026 that those impacts begin to be felt, Hougan questioned whether another “crypto winter” is really on the cards next year as prior cycles would predict.

“If BlackRock CEO Larry Fink is calling for $700k bitcoin, are we really going to see a 70% pullback?” he said.

However, the Bitwise CIO suspects the four-year cycle won’t be fully overcome just yet as leverage builds up as the bull market continues, but he does anticipate shorter and shallower pullbacks than in years gone by as the crypto space has matured.

“As for now, it's full steam ahead. The crypto train is leaving the station,” he said.