Bitwise CIO Forecasts Bitcoin’s Next Surge as Stablecoin Turbulence Shakes Markets

Bitcoin stands on the brink of a major breakout—just as stablecoins throw a wrench into the system.

The Institutional Catalyst

Bitwise's Chief Investment Officer sees a perfect storm brewing for Bitcoin. Regulatory clarity, ETF inflows, and a flight from traditional finance's shaky foundations are converging. This isn't about retail FOMO anymore; it's about balance sheet allocation.

The Stablecoin Spanner in the Works

Meanwhile, the supposed 'stable' corner of crypto is anything but. Pegs are wobbling, reserves are being questioned, and the domino effect threatens to spill over into broader liquidity. It's the old finance playbook: promise stability, deliver complexity, and charge fees for the privilege.

The Contradiction at the Core

Here's the ironic twist. The very volatility Bitcoin was designed to hedge against is now being amplified by the tools built to tame it. Stablecoins, meant to be a safe harbor, are creating waves that could either capsize the boat or push more sailors toward Bitcoin's decentralized life raft.

The market's at a crossroads: trust the new digital gold, or the old promises repackaged in algorithmic code? One promises a breakthrough; the other, déjà vu.

Bitcoin and Crypto Enter a New Institutional Cycle

Bitwise analysts are quite positive about the future of Bitcoin as well as the entire cryptocurrency market as we approach 2026.

Hougan and Rasmussen believe that Bitcoin is expected to defy its four-year cycle by smashing past records with a new all-time high, perhaps a touch above the previous record of $126,000. This round of growth isn’t triggered by halving events or interest rate changes.

According to analysts, this is because bitcoin has become less volatile with institutions participating. However, stock markets, including top stocks like NVIDIA and Tesla, are also becoming more volatile.

This development is making Bitcoin look attractive for investment because it can provide steady and uncorrelated investment returns.

Tokenization and Mainstream Adoption Accelerate

This is because tokenization of traditional assets and the development of stablecoins have opened access to cryptocurrencies for traditional investors.

According to Bitwise, financial advisors in the U.S. and family offices are making use of digital assets in various ways. These include the usage of Bitcoin or ethereum as collateral in order to obtain loans on Coinbase.

Loans exceeding $1 billion have been processed in this way by various investors, with others seeking loans of up to $1 million in USDC. This is contributing to crypto moving from being a niche investment instrument to becoming a mainstream asset class.

By providing individuals with investment options in digital assets that align with traditional investment patterns, tokenization and stablecoins bridge the gap between traditional finance and the digital economy. As a result, adoption of crypto is expected to rise in 2026 despite AI attracting most investment.