In 2014, Bitcoin recorded a -57.6% change. In 2018 and 2022, it also showed declines of -73.3% and -64.3%, respectively. This suggests that the Bitcoin market follows a four-year boom-and-bust cycle. In short, every fourth year, the market experiences a crash. Based on this pattern, 2026 could be a challenging year for BTC.
A recent statement by Matt Hougan, the Global Head of Research at Bitwise Asset Management, suggests that few experts believe BTC will face a major crash in 2026. Why? Want to know more? Keep reading!
Understanding Bitcoin's Traditional 4-Year Cycle
The -57.6% drop in 2014 marked the lowest point of Bitcoin’s first cycle. In 2011 and 2012, the market saw gains of +1,435% and +183.5%, respectively. By 2013, the third year of the cycle, Bitcoin experienced a massive rally of +5,435%.
Similarly, in 2018, Bitcoin saw its biggest drop in the second cycle, declining by -73.3%. The previous two years had recorded +34.4% in 2015 and +123.8% in 2016. In 2017, Bitcoin surged by +1,369%.
The third cycle followed a similar pattern, with a -64.3% drop in 2022. However, unlike previous cycles, the market didn’t outperform the second year’s +304.1% growth in its third year (+59.6%).
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Causes of Previous Crypto Market Crashes
One of the main reasons for the Bitcoin market crash in 2014 was the collapse of Mt. Gox. In 2018, the U.S. Securities and Exchange Commission’s (SEC) crackdown on Initial Coin Offerings (ICOs) played a significant role. In 2022, the collapse of major players like FTX, Three Arrows Capital, Celsius, and BlockFi triggered the downturn.
Could the Bitcoin Cycle Change?
Given historical trends, it seems logical to expect a crash in 2026. So why do experts like Matt Hougan disagree?
The key argument is that the crypto market is now far more mature than it was in 2014, 2018, or 2022.
The political climate in the U.S. has shifted in favor of the crypto industry following Donald Trump’s victory last November.
Shortly after assuming office as President of the United States, Trump signed an executive order aimed at bringing greater clarity to crypto regulations and exploring the possibility of creating a national digital asset reserve.
Experts like Hougan believe that these developments could inject trillions of dollars into the Bitcoin market.
Highlighting the favorable environment created by the removal of the controversial Staff Accounting Bulletin 121, which required financial institutions holding cryptocurrencies to record them as liabilities, Hougan recently expressed his highly optimistic outlook for the BTC market. However, he noted that Bitcoin might not immediately reflect the impact of these developments.
Bitcoin Price Prediction
Hougan predicts that the Bitcoin market could reach $200,000 by the end of 2025. Interestingly, he stated that the creation of a U.S. Bitcoin reserve is not a prerequisite for reaching this price milestone.
Bitcoin’s four-year cycle has historically been a strong pattern, but Trump’s crypto-friendly policies and Wall Street’s increasing involvement could shift the dynamics. While 2026 may still bring volatility, experts believe the market is stronger than ever before. With a $200,000 BTC forecast by 2025, the coming years could redefine the future of cryptocurrencies. 🚀
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