On Jan. 23, 2025, President Donald Trump issued an executive order that could change Bitcoin’s typical four-year market cycle, which has seen periods of growth followed by sharp downturns. Historically, Bitcoin has experienced losses in 2014, 2018, and 2022, with growth occurring in the years between. The next pullback was expected to happen in 2026, but experts, including Matt Hougan from Bitwise, believe that Trump’s order could alter this pattern.
The order focuses on expanding the U.S. digital asset ecosystem, which includes creating a national crypto stockpile and setting the stage for a clear regulatory framework. These measures, according to Hougan, could lead to the “mainstreaming of crypto,” with increased involvement from banks and Wall Street firms. Hougan predicts that the resulting institutional backing could bring trillions of dollars into the cryptocurrency market, further solidifying its role in the financial system.
Despite the optimism, Hougan acknowledges that Bitcoin’s four-year cycle won’t be completely avoided. He believes that future market pullbacks will likely be “shorter and shallower” than in past cycles due to the increased variety of investors and a more mature market. Institutional investors are now entering the space, bringing more stability to what was once a volatile market driven by retail investors. However, while volatility is expected to persist, Hougan remains confident that Bitcoin’s resilience will continue to drive growth, even if market downturns occur.
The crypto space has faced numerous challenges over the years. The 2022 downturn was heavily influenced by the bankruptcies of major players like FTX, Three Arrows Capital, and Celsius. Earlier cycles were impacted by regulatory crackdowns, such as the SEC’s actions against initial coin offerings and the collapse of Mt. Gox. Despite these setbacks, Bitcoin has always rebounded, and the growing interest from institutional investors is expected to help mitigate severe downturns in the future.
The full effects of Trump’s executive order won’t be felt immediately. White House crypto czar David Sacks will need time to craft the necessary regulatory framework, and Wall Street institutions will need time to engage with the cryptocurrency market fully. However, recent regulatory changes, such as the SEC’s decision to cancel the Staff Accounting Bulletin 121 rule—which required financial firms to treat crypto assets as liabilities—have made it easier for banks to custody crypto assets.
Bitwise’s Bitcoin price prediction remains bullish, with a target of $200,000 by the end of 2025. This forecast remains even without the establishment of a strategic Bitcoin reserve. While the market will continue to experience volatility, Hougan believes future downturns will be less severe due to increased institutional participation.
