Bitwise Flags Three Conditions Crypto Must Meet To Reach New All-Time Highs In 2026

Bitwise CIO Matt Hougan has outlined three key conditions that must be met for cryptocurrency to reach new all-time highs in 2026. These include post-October liquidation stability, the passage of the CLARITY Act, and a steady performance in equities.

The October 10 market crash caused widespread concern among investors, leading to $19 billion in futures liquidations and forcing many to reassess their positions. This uncertainty lingered through late 2025 and only began to subside in early 2026.

The CLARITY Act is currently moving through the US Senate and is set for a markup on January 15. If passed, it could provide the necessary regulatory clarity for long-term growth and investor confidence.

What Are the Three Checkpoints for a Crypto All-Time High in 2026?

The first checkpoint is the stabilization of market conditions following the October sell-off. Investors are still cautious about the potential for forced liquidations or market-maker exit strategies.

The second is legislative action. The CLARITY Act is seen as a critical step in providing a legal framework for digital assets in the US. It aims to define asset classifications and market participant rules, which are currently lacking.

The third is the continued performance of the broader equity market. A strong equities market is seen as essential to maintaining risk-on sentiment, which supports crypto adoption and price stability.

How Are Markets Reacting to the New Year Outlook?

Crypto markets have shown signs of recovery in January 2026, with total market capitalization reaching a seven-week high of $3.3 trillion. This reflects renewed investor confidence as past volatility fades from memory.

Ethereum (ETH) and Bitcoin (BTC) have both seen steady price action, with Bitcoin trading near $94,000 and Ethereum above $3,200. Analysts are watching for potential moves toward $100,000 for Bitcoin.

What Are Analysts Watching for in 2026?

Industry experts have provided a wide range of price forecasts for Bitcoin, from $75,000 to $225,000. Factors such as lower interest rates, institutional adoption, and regulatory developments are key influencers.

Regulatory clarity remains a central theme. The CLARITY Act is expected to reduce uncertainty by defining the roles of regulatory bodies like the Commodity Futures Trading Commission.

Institutional interest has also grown, with more firms entering the space. For example, BitMine has purchased over 4.14 million ETH, adding over $13 billion in holdings. This indicates continued institutional confidence.

What Are the Risks and Uncertainties for 2026?

Despite the positive signs, risks remain. Geopolitical tensions, inflation concerns, and the outcome of the 2026 midterm elections could all impact market sentiment.

The US banking sector has also raised concerns, particularly about the potential disruption from yield-bearing stablecoins. Some banks argue this could threaten traditional revenue streams.

Analysts remain cautious. Morgan Stanley and other major players are closely monitoring the regulatory environment and ETF inflows as key indicators for the year.

What's the Outlook for ETFs and Institutional Adoption in 2026?

Exchange-traded funds (ETFs) are expected to play a major role in Bitcoin's performance. ETF inflows have been strong, particularly in the early part of 2026. This trend is seen as a positive indicator of broader institutional adoption.

Coinbase executives have emphasized that regulatory clarity and market maker stability are critical for continued growth. Institutional buying has increased, especially after the October 2025 crash.

What’s Next for the CLARITY Act and Legislative Progress?

The Senate Banking Committee is scheduled to mark up the CLARITY Act on January 15. Passage would represent a major milestone for the crypto industry and could unlock broader adoption.

Senate Majority Leader John Thune has expressed optimism that the bill will move forward quickly. However, political considerations may slow progress as the 2026 midterm elections approach.

The broader regulatory environment has shifted, with the SEC now operating with a full Republican composition. This is expected to lead to more pro-crypto rulemaking in 2026.