Could Donald Trump’s recent executive order on cryptocurrency really disrupt Bitcoin’s infamous four-year boom-and-bust cycle? According to Bitwise’s Matt Hougan, we might be in for a new era of crypto where the old patterns of volatility start to fade. Let’s dive in and see how Trump’s move could reshape the digital asset landscape.
The 4-Year Cycle: Bitcoin’s Roller Coaster Ride
For over a decade now, Bitcoin has followed a consistent cycle: big gains followed by steep losses every four years. These “boom and bust” phases have become almost predictable. In fact, Bitcoin’s 16-year history has seen it hit major highs during the three years between each pullback, with the next expected dip in 2026—if the cycle continues as expected.
But is that going to change? Matt Hougan, the Chief Investment Officer at Bitwise, thinks it might. While he doesn’t believe crypto will completely shake off its notorious four-year cycle, Hougan predicts that market pullbacks will be “shorter and shallower” than in previous cycles.
Trump’s Executive Order: A Game-Changer for Crypto?
Enter Donald Trump’s executive order on January 23, 2024, which could play a huge role in turning the tide. In a recent note, Hougan suggested that this order, along with some changes over at the SEC, signals that crypto has finally gone fully mainstream. Now, big banks and Wall Street are poised to “move aggressively into the space,” meaning a major influx of capital and institutional interest is on the horizon.
Trump’s order is part of a broader push to explore creating a digital asset stockpile and establish a regulatory framework for crypto. According to Hougan, the impact of this executive move could lead to the influx of trillions of dollars into the market—not just the billions we’re used to seeing.
Crypto ETFs: The Next Big Wave of Investment
Hougan is particularly bullish on crypto exchange-traded funds (ETFs). He points out that these funds are already “big enough” to bring in billions of dollars from new investors. But with Trump’s new directive, things could accelerate even faster. As the market matures and more institutional investors pile in, Hougan believes that we could be looking at a sea change in how Bitcoin and other cryptocurrencies are traded.
The maturation of crypto means that its once-volatile, retail-driven market is now attracting a more diverse pool of buyers—many of whom are less likely to panic sell during dips. This could mean less wild volatility and, potentially, fewer dramatic crashes in the future.
The 2022 Crash: A Case Study in Crypto’s Growing Pains
Of course, not everything has been smooth sailing for crypto. The 2022 crash is still fresh in everyone’s mind. Major bankruptcies from platforms like FTX, Three Arrows Capital, Genesis, BlockFi, and Celsius all contributed to that year’s market downturn. Add to that the SEC’s crackdown on initial coin offerings (ICOs) and the collapse of Mt. Gox, and it’s clear that these pullbacks were often triggered by both market forces and regulatory pressure.
But Hougan believes that the crypto space has matured enough to handle such setbacks with less damage. “There’s a greater variety of buyers and more value-oriented investors than ever before,” he says, suggesting that this new wave of institutional investment and growing interest from mainstream finance will make the market more resilient in the long term.
The Road Ahead: Will 2026 Bring a Big Pullback?
So, what can we expect going forward? Hougan acknowledges that volatility will always be part of the crypto landscape, but he’s optimistic. He’s not ready to bet against crypto, even in 2026, when the next pullback is expected. In fact, he stands by Bitwise’s bold $200,000 price prediction for Bitcoin by the end of 2025—a prediction that could come true regardless of whether or not a Bitcoin stockpile is created.
While Trump’s executive order might not deliver immediate results, it sets the stage for a crypto market that’s more connected to traditional finance. As Hougan puts it, Wall Street’s “behemoths” will take some time to fully realize crypto’s potential, but with the SEC easing up on regulations like Staff Accounting Bulletin 121 (which previously required financial firms to treat crypto as liabilities), the stage is being set for institutional players to dive in headfirst.
What Does This All Mean for Bitcoin’s Future?
If we’re looking at the long term, the influence of Trump’s order, coupled with increased institutional participation and a more favorable regulatory environment, could make Bitcoin and other cryptocurrencies a lot more stable—at least in comparison to their wild early years.
As more Wall Street giants begin to interact with crypto, we’re likely to see less reliance on speculative trading and more strategic investments. And that could mean a new phase for Bitcoin—one where the booms are bigger, but the busts are more controlled.
