Bitwise’s Matt Hougan Offers Significant Forecast on Bitcoin’s Upcoming Bear Market

Bitwise’s Chief Funding Officer Matt Hougan has informed Cryptonews that he anticipates Bitcoin will experience a “dramatically greater” increase in 2025 — suggesting that the four-year cycle may also be coming to an end.

During a discussion at the Digital Assets Forum in London, he acknowledged that leverage is beginning to accumulate in the markets, but shifting regulatory perspectives in Washington indicate that major Wall Street firms are now entering the space.

“These entities manage trillions of dollars in assets. So just as this four-year cycle would typically peak, I believe it will encounter — and be overtaken by — this influx of institutional capital entering this sector. I expect 2026 to be volatile… but I believe it will trend upward, and I think it will continue from there.”

Bitcoin has established a reliable track record of yielding three years of strong returns, followed by a significant downturn in the fourth year. However, Hougan is of the opinion that the upcoming decline will be “shorter and shallower” compared to the 70% or 80% declines seen previously.

“You’ll recall past winters when crypto faced an existential crisis — with concerns that the industry was ending or heading to zero. It’s no longer going to zero. No one believes that — and this means value buyers will step in. Therefore, I would expect to see a 30%, 35% pullback.”

With Bitcoin’s latest halving resulting in only 450 new coins entering circulation daily, exchange-traded funds are acquiring this cryptocurrency at a much faster rate. Hougan added:

“I believe the flows in 2025 will surpass those of 2024. I think 2026 will exceed 2025. I expect 2027 to be larger than 2026. We have already witnessed an impact. ETFs propelled us from $20,000, to $40,000, to $70,000, to $100,000. I believe it will push us even higher beyond that.”

Bitwise positions itself as the largest crypto index fund manager globally — offering ETFs that track the spot prices of Bitcoin and Ether. It recently introduced a fund that combines both digital assets into a single product.

Data from SoSoValue indicates that the total net assets in BTC ETFs currently stand at $116 billion, while only $10 billion is invested in ETH ETFs. So, does Hougan believe there is institutional interest for funds tracking smaller cryptocurrencies?

“I think there will be eventually. However, if you look at Ether, it faced a challenging year from a crypto-native perspective in 2024. There weren’t many retail buyers of ETH, as most were focused on the Bitcoin trend or perhaps looking beyond ETH to Solana. I believe you will see these flows into Ether increase in 2025. Institutions are very interested in the growth of stablecoins, the expansion of tokenization, and the rise of agentic AI. These are all themes that directly relate to Ethereum’s narrative. As people recognize that, you will see $10+ billion flow into these ETFs this year. It didn’t start off strong, but I believe they are gaining momentum.”

Cryptonews also inquired about Bitwise’s recent application for a Dogecoin ETF — and whether a meme cryptocurrency like this holds any appeal for institutional investors. While he emphasized that he could not discuss this specific filing, his response was still insightful.

“I don’t think most investors should own Dogecoin. I don’t believe most institutions want to hold Dogecoin — it’s not Bitcoin. It’s not a globally, systemically important currency … it’s a novelty coin with a dog as a logo. However, the reality is that many people want to own it. There’s a community that passionately believes in it. It has been around for 12 years, it existed before Mt. Gox collapsed … and for those who wish to own it, it would be beneficial if they could access a low-cost, secure ETF that practices best institutional custody.”

He went on to dismiss recent criticism from Bryan Armour of Morningstar, who was quoted by the Financial Times as stating that meme coin ETFs are a “type of speculative instrument that might make more sense in a casino than in a stock market.” Hougan remarked:

“That sounds like what they said about Bitcoin five years ago, and now BlackRock’s CEO suggests it could reach $700,000. People are always skeptical of early-stage disruptive technologies.”

In another part of the interview, Hougan stated that it “isn’t his base case” for Donald Trump to acquire 1 million BTC over five years for a strategic reserve, as proposed by Senator Cynthia Lummis.

“The U.S. holds too much gold. It could sell some of that gold and diversify into Bitcoin. As a U.S. citizen, I would like to see that happen. Will it occur? I’m not sure. Could it happen? Absolutely. And that implies that other countries will consider it. You already saw the Czech National Bank governor discussing it. We’ve had conversations with sovereigns. People are definitely interested in it.”

The SEC recently revoked SAB 121, a contentious rule that made it exceedingly difficult for banks to take custody of digital assets. Does Hougan believe this could lead traditional finance firms to capture market share from the crypto-native brands that have been present all along?

“I don’t think it’s a threat. I believe it legitimizes the space and expands the market. If you look at my own area in ETFs — BlackRock entered, attracting a significant amount of assets, and Bitwise’s assets under management have increased from $1 billion to $12 billion … we are still very early in the growth of crypto, and the most important factor isn’t market share, it’s expanding the market.”

Looking ahead, Hougan sees the primary risk and opportunity for Bitcoin in 2025 revolving around regulatory clarity.

“Anyone who assumes that the government will necessarily get it right hasn’t been observing the world for the last 5,000 years. Governments are complicated, they are run by people, and they have multiple interests. Therefore, we must closely monitor what policies emerge from this transition.”

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