Trump's Crypto Order: Bitcoin's Four-Year Cycle in Jeopardy

U.S. President Donald Trump's executive order on cryptocurrencies, coupled with a broader regulatory shift in the United States, could potentially disrupt Bitcoin's four-year cycle, according to Matt Hougan, chief investment officer at asset manager Bitwise. In a note published on Jan. 29, Hougan wondered if the change in Washington's attitude toward crypto could extend the current bull market into 2026 and beyond.

Historically, Bitcoin has followed a four-year cycle, with three years of general upward price movement in a bull market, followed by a pullback. This pattern has played out in 2014 after the Mt. Gox collapse, in 2018 amid the Securities and Exchange's ICO crackdown, and in 2022 following the Terra ecosystem's collapse. In this case, the 2022 bear market paved the way for a "great 2023 and 2024".

Hougan believes that if the classic four-year cycle were to hold, 2025 would be a great year for crypto. He predicts that Bitcoin's price will double this year to above $200,000, driven by flows into ETFs and Bitcoin purchases by corporations and governments. This may turn out to be conservative, as the current cycle got its catalyst from Grayscale's victory against the SEC, which accelerated the eventual approval of spot Bitcoin ETFs in the U.S.

Trump's victory in November to become the 47th U.S. president added to this bullish momentum. However, could the policy shift in Washington under a pro-crypto Trump administration break Bitcoin's four-year cycle? Hougan believes it could. He points out that early signs suggest the potential for a painful bear market, following historical patterns of excessive leveraging in overheated markets. However, Trump's crypto executive order, signed in the first week of his return to the White House, could change this trajectory.

The order signals the "full mainstreaming of crypto" amid several other positive developments. One key shift is the potential regulatory framework that could allow banks to fully enter the crypto custody market, boosting Wall Street's confidence in digital assets. A national digital assets stockpile is another big factor to consider. Taken together, the EO hints at a scenario that could see trillions of dollars flow into crypto.

However