Trump's Crypto Order: Impact on Bitcoin's Future
Bitwise Chief Investment Officer (CIO) Matt Hougan suggests President Trump's recent executive order on cryptocurrencies may significantly alter Bitcoin's historical four-year cycle. This cycle, typically characterized by three years of growth followed by a correction, might not unfold as predicted in 2026.
Trump's Crypto Order Could Reshape Bitcoin's Trajectory
In a recent memo, Hougan posited that the executive order could prolong Bitcoin's bull market. He attributes the current cycle, beginning in 2023, to the deleveraging following 2022's crypto market turmoil and the subsequent approval of spot Bitcoin ETFs in early 2024. These factors, coupled with increased regulatory clarity, are contributing to the ongoing rally.
Hougan forecasts Bitcoin reaching $200,000 in 2025, driven by heightened institutional investment and corporate participation. He stated, "We’re on the record predicting that bitcoin’s price will double this year to above $200,000, driven by flows into ETFs and Bitcoin purchases by corporations and governments. That may turn out to be conservative."
This prediction comes on the heels of a recent market downturn that wiped out $120 billion in value. Hougan, however, points to Bitcoin's historical tendency to recover strongly after such corrections, citing an average 189% gain within a year of past dips.
Institutional Adoption and Market Expansion
A key element of Trump's executive order, according to Hougan, is its potential to accelerate Bitcoin's institutional adoption. The order designates digital assets a national priority, providing a framework for regulation and potentially attracting substantial investment from banks, asset managers, and corporations. This increased participation is expected to enhance market liquidity and price stability.
Several states have already begun establishing Bitcoin reserves, reflecting the growing state-level interest in digital assets. Texas, for example, has included a Bitcoin reserve in Lt. Gov. Dan Patrick’s 2025 agenda, following similar initiatives in Utah, Oklahoma, and Massachusetts.
The Evolving Four-Year Cycle
While optimistic, Hougan acknowledges the potential for future corrections due to factors like increased leverage in the system. He expects that future corrections will be less severe and shorter-lived than previous downturns. The presence of long-term institutional and governmental investors is anticipated to act as a market stabilizer.
Trump’s executive order provides a structured regulatory environment, potentially further legitimizing Bitcoin. Furthermore, Trump Media's recent announcement of a $250 million investment plan in crypto has generated significant market attention.
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