Bitcoin is entering a new phase: instead of boom-and-bust four‑year cycles, the market is likely shifting into a decade-long grind of consistent, but more modest, returns. That’s the view of Matt Hougan, Chief Investment Officer at Bitwise, who argues that the classic halving-driven pattern is being overshadowed by deeper structural forces such as institutional participation, regulatory clarity, and the rise of stablecoins.
Speaking in an interview, Hougan said he believes the traditional four‑year Bitcoin cycle is losing its dominance as the primary driver of price action. In previous eras, halvings tended to frame market expectations: a supply shock every four years, followed by euphoric rallies and brutal corrections. Today, he contends, the environment looks very different.
According to Hougan, Bitcoin is likely to deliver “strong, not spectacular” returns over the coming decade. He expects prices to trend higher over time, but within a framework of lower volatility and more measured moves—more like a maturing asset class than a speculative wild card. He said he anticipates the market to be higher next year, but as part of a sustained 10‑year upward grind rather than a single explosive bull run.
One of the data points he uses to support this thesis is the decline in Bitcoin’s volatility. Over the last year, he noted, Bitcoin has actually shown less price volatility than high‑profile tech stock NVIDIA. For an asset long known for extreme price swings, that’s a sign that something fundamental has changed in how the market is structured and who is participating in it.
The growing presence of institutional investors, from hedge funds to university endowments, is at the heart of that shift. Institutions typically follow formal investment mandates and disciplined portfolio-rebalancing rules rather than chasing momentum. When allocations drift above target after a rally, institutional managers often sell to rebalance; when prices fall and allocations drop below target, they buy. This mechanical approach tends to dampen volatility instead of amplifying it.
By contrast, Hougan highlighted how retail participants have traditionally behaved in a strongly pro‑cyclical way. When markets heat up, retail investors are inclined to buy into the rally; when fear takes over, they sell into weakness. That pattern reinforces booms and busts. Institutional investors, whose policies often require them to “buy when it’s down and trim when it’s up,” provide a counterweight to that behavior.
Hougan described an ongoing transfer of ownership from short‑term retail speculators to longer‑horizon institutional holders. In his framing, this produces a price pattern that looks like a “staircase up and an elevator down”: prices grind higher as institutional capital slowly accumulates, then occasionally correct sharply when sentiment shifts or macro shocks hit. Yet, because of that steady institutional bid, the drawdowns are, in his view, becoming more contained than they were in prior cycles.
He pointed to the current downturn as an example. Bitcoin is down about 30% from its October peak, but in previous cycles similar conditions might have produced drawdowns of 60% or more. Hougan attributes the relatively shallower correction to “persistent, slow-moving institutional buying that’s keeping the market up,” even as more reactive retail capital exits.
Regulation is another pillar of his argument. Hougan characterized the impact of the Trump administration’s stance on digital assets as a largely one‑off event that helped ease a key barrier for big investors: regulatory uncertainty. In earlier years, when institutions were asked why they stayed on the sidelines, Hougan said the top concern was not necessarily wild price swings or valuation arguments—it was the lack of clarity over how regulators would treat Bitcoin and other digital assets.
As the regulatory environment has evolved and become more defined, the “career risk” for institutional investors considering Bitcoin has decreased. Hougan and other industry executives see formal legislation and clearer rules not as minor details, but as critical catalysts that can unlock new waves of capital. In their view, sustainable rallies are increasingly tied to regulatory milestones rather than social-media hype or purely speculative narratives.
Hougan warned, however, that this regulatory clarity is not guaranteed. If key legislative efforts fail or stall, it could act as a ceiling on crypto market performance. He suggested that passing major clarity-focused legislation would function like an “all-clear” signal after the recent pullback, potentially energizing institutional allocators who have been waiting on the sidelines for definitive guidance.
Beyond regulation and institutions, stablecoins form the third major force reshaping the Bitcoin landscape. The rapid adoption of dollar-pegged digital assets has created a permanent on-chain liquidity layer that did not exist in earlier cycles. This makes capital rotation between Bitcoin, other cryptocurrencies, and cash-like positions faster and more efficient, contributing to a more mature and interconnected market structure.
For long-term investors, Hougan’s “10-year grind” narrative carries important implications. Bitcoin, in his telling, is evolving from a speculative trade into a strategic asset that might sit alongside gold, equities, and bonds in diversified portfolios. The days of routine 10x moves within a single cycle may be fading, but the potential for meaningful, equity‑like returns—combined with diversification benefits—could make Bitcoin attractive to a different profile of investor.
However, a shift to steadier returns does not mean risk has disappeared. Even with lower volatility than some high‑growth tech stocks over a particular window, Bitcoin remains far more volatile than traditional safe-haven assets and is still tightly linked to liquidity conditions, macro policy, and investor sentiment. Long-term holders must be prepared for significant price swings, including sharp drawdowns, even within a broader upward trajectory.
The diminishing dominance of the four‑year halving cycle also suggests investors should update their playbooks. Strategies that simply front‑run the halving based on historical patterns may become less reliable as institutional flows, macro factors, and regulations play a bigger role. Instead, understanding how large allocators structure their portfolios, how new rules are shaping market access, and how stablecoins affect liquidity may become more important than watching the block-reward countdown clock.
This potential regime change could also alter how Bitcoin is discussed in boardrooms and investment committees. As volatility moderates and regulatory risks decline, Bitcoin’s narrative may slowly pivot from “high-risk speculation” to “non-sovereign, digital monetary asset” with a defined role in risk-managed portfolios. That transition would likely further reinforce Hougan’s thesis: more steady inflows, fewer parabolic manias, and a market that behaves increasingly like a mainstream financial asset.
At the same time, investors should be realistic about return expectations. Hougan repeatedly emphasizes “strong, not spectacular” performance—language that aligns more with expectations for equities over long horizons than with the explosive upside that early crypto adopters experienced. The trade-off for that lower upside is a less chaotic ride and a market supported by deeper, more stable capital pools.
In this emerging framework, Bitcoin’s future may be less about getting rich quickly and more about compounding wealth slowly over time, supported by institutional adoption, cleaned‑up regulation, and a more robust market infrastructure. For those willing to think in decades rather than months, Hougan’s “10-year grind” may be less a warning and more a blueprint for how Bitcoin could mature into a lasting fixture of the global financial system.