Bitwise CIO Drops Bombshell: The Crypto Cycle Is Dead—Institutional Money Now Runs the Show

Crypto's retail frenzy era is over—Wall Street just took the keys.

Forget moonboys and meme coins. The Bitwise CIO just declared the old crypto cycle extinct, and the data backs it up: institutional inflows now dwarf retail speculation. Hedge funds, family offices, and even pension funds are quietly building positions while Twitter degens argue about shitcoin trends.

The new playbook? Infrastructure plays, regulated products, and—irony alert—centralized custody solutions. Because nothing screams 'decentralized revolution' like BlackRock filing for a Bitcoin ETF.

One hedge fund manager quipped, 'We’re not here for the ideology—we’re here for the asymmetric returns.' And with that, crypto officially became just another asset class. Pass the champagne (and the compliance paperwork).

ETF flows drive new timeline

Hougan identified several forces operating on longer timelines than the traditional four-year pattern.

ETF asset migration represents a 5-10 year trend that began in 2024, while broader institutional adoption is “just getting started” with ETFs still gaining approval on national platforms.

Why is the four-year cycle dead?

1) The forces that have created prior four-year cycles are weaker:

i) The halving is half as important every four years;

ii) The interest rate cycle is positive for crypto, not negative (as it was in 2018 and 2022);

iii) Blow-up risk is… https://t.co/F9ybjHEeB5

“Pensions and endowments just now considering crypto,” Hougan noted, while regulatory progress that began in January “will run for multiple years.”

Wall Street’s crypto infrastructure investment, accelerating after the GENIUS Act passage, will continue “in the quarters and years to come.”

During a recent conversation with analysts Kyle Chassé and James Seyffart, Hougan predicted 2026 will be “a good year” despite expected volatility. He characterized the outlook as “sustained steady boom” rather than a super-cycle.

Cycle amplitude expected to diminish

While some analysts maintain that crypto cycles will continue with reduced amplitude, Hougan argued that institutional participation fundamentally changes the market situation.

James Seyffart suggested cycles remain “intact, but muted” with smaller price swings as institutional backing provides stability.

“I don’t know if we’ll see like an 80% pullback. Could we see 50 maybe?” Seyffart questioned. He also noted that institutions and Treasury companies create “force buyers” that moderate volatility.

Hougan revealed the extensive institutional onboarding process, with recent compliance packages reaching 650 pages and requiring multiple on-site visits.

Clients beginning quarterly meetings, when bitcoin ETFs launched, will complete their evaluation cycles by year-end 2025, positioning them to allocate in 2026.

This timeline supports his thesis that 2026 will break the traditional four-year cycle pattern. Hougan expects record flows in both 2025 and 2026 as institutional due diligence processes conclude.