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.
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.
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.
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