Trump’s Executive Order Could Impact Bitcoin's Four-Year Cycle, Says Bitwise's Matt Hougan
The recent executive order signed by President Donald Trump could bring significant changes to Bitcoin's traditional four-year cycle, according to insights shared by Matt Hougan, Chief Investment Officer at Bitwise.
Despite ongoing challenges in breaking free from the cyclical nature of the market, Hougan remains optimistic about the future, anticipating that any potential dips in the market may be less severe and of shorter duration compared to previous cycles.
In a recent memo, Hougan pointed out the potential impact of Trump’s executive order and the Securities and Exchange Commission's (SEC) evolving pro-crypto stance as key drivers for Bitcoin's path towards mainstream adoption.
Following the presidential order to create a "national digital asset stockpile" on January 23, crypto inflows soared to $1.9 billion, opening doors for major Wall Street players and investors to venture into the crypto space more aggressively.
Hougan identified the start of the current crypto cycle back in March 2023, triggered by Grayscale's victory over the SEC regarding a Bitcoin ETF. Subsequently, the launch of ETFs in January 2024 saw a massive influx of capital into the market from new investors.
Looking ahead, Hougan believes that Trump's executive order could pave the way for an even more significant transformation in the crypto industry, potentially unlocking trillions of dollars as banks start offering crypto custody services alongside traditional assets, stablecoins become integrated into global payment systems, and major institutions enter the crypto space.
While Bitcoin's four-year cycle has historically followed patterns influenced by halving events, Hougan remains upbeat about the long-term prospects of the crypto market, noting the increasing diversity of investors and a shift towards value-oriented investment strategies.
In terms of price predictions, Hougan foresees a bullish scenario for 2025, with Bitcoin potentially doubling in value to surpass $200,000. Factors such as ETF inflows, corporate and governmental Bitcoin purchases, and broader adoption are expected to drive this growth.
Despite acknowledging the potential for increased risk and volatility in the market due to regulatory changes and evolving market dynamics, Hougan believes that any market corrections are likely to be temporary and less severe, thanks to the growing maturity of the crypto market and the presence of a more diverse and value-driven investor base.
As the crypto space continues to evolve, Hougan anticipates that regulatory developments and industry adaptations will unfold gradually over the coming years, emphasizing the importance of building a robust regulatory framework to support the market's growth and stability.