Bitwise Predicts Bitcoin ATH in 2026 Despite Bear Market Struggles

Bitwise’s analysis directly confronts Bitcoin’s long-observed rhythm of three strong years followed by a sharp correction, a pattern historically tied to the halving, interest rate fluctuations, and leverage cycles. According to Matt Hougan, this cycle is losing its predictive power. The impact of each halving event is diminishing over time, and the macroeconomic environment expected in 2026 diverges sharply from past downturns. Where previous corrections coincided with rising interest rates, Bitwise anticipates rates will be falling in 2026.

Furthermore, the firm argues the market’s structural risk has declined. The record liquidations witnessed in late 2025 catalyzed a significant reduction in systemic leverage. Coupled with clearer regulatory frameworks emerging after the pro-crypto shift following the 2024 United States election, the stage is set for a more stable foundation. “The forces behind those cycles are now much weaker,” the analysis states, creating room for a market driven by new, more sustainable fundamentals rather than speculative boom-and-bust patterns.

Bitwise identifies accelerating institutional adoption as the central engine for Bitcoin’s next major advance. The landmark approval of spot Bitcoin ETFs in 2024 is characterized not as the culmination of institutional interest, but as the opening of the floodgates. Hougan’s outlook specifies that 2026 is the year when major traditional finance platforms are expected to begin meaningful allocations.

The report names Morgan Stanley, Wells Fargo, and Merrill Lynch as key firms poised to enter, representing a massive influx of previously untapped capital from Wall Street and fintech. This institutional embrace, facilitated by the ETF wrapper and supportive regulation, is forecast to be the primary driver pushing Bitcoin to new record prices, potentially drawing “tens of billions of dollars” in new capital specifically in 2026.

Beyond price, Bitwise predicts Bitcoin will continue its maturation into a mainstream asset class, marked by declining volatility and reduced correlation with traditional markets. Hougan notes that Bitcoin’s volatility has been steadily declining for a decade as its investor base broadens through ETFs and other traditional investment products. A striking data point underscores this trend: in 2025, Bitcoin was already less volatile than the stock of Nvidia, one of the most widely held and traded equities.

This “derisking” reflects Bitcoin’s evolution and is expected to continue into 2026. Concurrently, Bitwise challenges the common perception that Bitcoin trades merely as a risk-on tech stock. The firm’s data shows Bitcoin’s correlation with the S&P 500 has typically remained below meaningfully high levels. Bitwise believes unique factors like regulatory progress and institutional inflows could propel Bitcoin higher even if equities face pressure from high valuations or slowing economic growth. This potential for strong returns combined with lower volatility and reduced correlation presents a compelling portfolio case for institutional investors.