Bitwise CIO Flags Overlooked Catalysts That Could Supercharge Crypto Rally

As digital asset prices hover near all-time highs, Bitwise Chief Investment Officer Matt Hougan believes several powerful but underappreciated trends could push the crypto market substantially higher through late 2025 and into 2026.

In a Wednesday memo to clients, Hougan said the industry already enjoys well-known bullish drivers—positive regulatory momentum, growing stablecoin adoption, surging corporate purchases, rapid exchange-traded fund (ETF) inflows, and renewed energy from Ethereum’s rally. However, he argued the market may be underestimating the scale of these forces while overlooking other developments entirely.

Governments Could Join the Buying Spree

Hougan identified potential government and central bank Bitcoin purchases as a top catalyst that markets have yet to fully price in. He described “The Three Horsemen of Bitcoin Demand” as ETFs, corporations, and governments, noting that while the first two have delivered—ETFs acquiring over 183,000 BTC and public corporations amassing more than 354,000 BTC—official state-level buying has been minimal so far.

Some jurisdictions, including Pakistan, Abu Dhabi, and the United States, have added small amounts. The US Strategic Bitcoin Reserve, created in March under President Donald Trump, currently holds only assets obtained through criminal forfeiture. Treasury Secretary Scott Bessent reiterated on Thursday that Washington will not purchase BTC outright but will stop selling seized coins, allowing the reserve to grow over time.

Hougan said private conversations suggest some sovereign buyers are quietly preparing to enter the market, even if no major announcements are expected before year-end. Any signs of coordinated state-level accumulation in 2026, he argued, could serve as a powerful price driver.

Dollar Policy and Interest Rates as a Hidden Tailwind

The Bitwise CIO also pointed to the unusual backdrop of Bitcoin trading near record highs while interest rates remain elevated. While traders expect rate cuts later this year, Hougan said the bigger story lies in the Trump administration’s push for a weaker US dollar and a more accommodative Federal Reserve.

Lower rates and a softer dollar, he argued, could unleash substantial upward pressure on Bitcoin prices through increased liquidity and money supply growth.

Volatility Shift Signals a “New Normal”

A third overlooked factor, according to Hougan, is Bitcoin’s declining volatility since the launch of US spot ETFs in January 2024. The influx of institutional buyers, combined with clearer regulatory frameworks, has helped stabilize trading patterns, making BTC’s price behavior more comparable to high-volatility tech stocks like Nvidia. Hougan believes this structural shift could encourage further institutional participation.

ICO Revival Could Bring New Capital Wave

Finally, Hougan floated the possibility of a return for Initial Coin Offerings. While ICOs have carried a tarnished reputation since the 2018 crash, he noted that SEC Chairman Paul Atkins recently outlined a framework for “ICO Market 2.0” during his Project Crypto address. A regulated resurgence of token launches could attract significant fresh capital, he said.

“Good News That Isn’t Priced In”

Hougan concluded that markets rise not merely on positive developments, but on positive developments investors have yet to account for. “The market in general underappreciates the scale of the bull market taking place in crypto,” he wrote. “But I also think it’s overlooking some specific catalysts that will play out in the months and years to come.”