Trump's Crypto Order: Unlocking Trillions, Disrupting Four-Year Cycle
1min read Bitwise, a leading cryptocurrency asset manager, has forecasted significant growth in the crypto market, driven by President Donald Trump's recent executive order on digital assets. The order, issued on January 23, has sparked optimism about the future of the crypto market, with Matt Hougan, Bitwise's investment chief, believing it could disrupt the four-year market boom-and-bust cycle that Bitcoin and other cryptocurrencies have followed over the past decade.
Hougan described the executive order as a pivotal step toward "the full mainstreaming of crypto," paving the way for banks and Wall Street to aggressively enter the space. The directive calls for exploring a federal digital asset stockpile and drafting comprehensive regulatory frameworks, positioning itself as a landmark moment for the sector. Hougan noted that this initiative could unlock trillions in new investments, dwarfing the billions already flowing through crypto ETFs.
Over Bitcoin's 16-year lifespan, it has experienced a well-known four-year pattern: significant pullbacks in 2014, 2018, and 2022, followed by record highs in the three years between each dip. Analysts predict the next major market correction to occur in 2026 if this trend continues. However, Hougan suggested that the cycle's influence might be waning, with more value-driven investors and a broader base of buyers mitigating market volatility. "We won't fully escape the four-year pattern," he said, "but any pullback will likely be shorter and less severe than in previous years."
A significant aspect of Trump's executive order is its potential impact on Wall Street's involvement in crypto. With the Securities and Exchange Commission (SEC) canceling its Staff Accounting Bulletin 121 rule, banks can now more easily custody cryptocurrencies without treating them as liabilities on their balance sheets. Though immediate effects are unlikely, Hougan emphasized that White House crypto czar David Sacks will need time to develop the framework while financial giants navigate the learning curve.
Looking ahead, Bitwise remains optimistic, maintaining its bold prediction that, by the end of 2025, regardless of whether a national strategic Bitcoin reserve is established, the crypto market will experience significant growth driven by increased institutional investment and regulatory clarity.
