Bitwise, a major crypto investment firm and index fund manager, is confident that Bitcoin will reach new all-time highs in 2026—even after a recent two-month slump. The firm believes that Bitcoin could break past its current record of $126,080, which was set in early October.

Traditionally, Bitcoin has followed a four-year cycle: three years of growth followed by one year of pullback. According to this pattern, 2026 should be a down year. However, Bitwise doesn’t see it playing out that way this time. The firm’s Chief Investment Officer, Matt Hougan, says the usual drivers behind these cycles—like the Bitcoin halving, interest rate shifts, and boom-and-bust market behavior—are no longer as influential as they once were.

One major reason for this change? Institutional investors are steadily pouring money into crypto, especially after the green light was given to Bitcoin ETFs. Combined with more favorable crypto regulations, this momentum could push Bitcoin to new heights.

At the moment, Bitcoin is trading at around $87,800. That’s a 2% gain in the past 24 hours but still about 30% lower than its previous peak. Over the last year, Bitcoin has dropped nearly 18%, while traditional markets like the Nasdaq and S&P 500 have seen gains of 14.5% and 12%, respectively.

Bitwise expects this pattern to shift further by 2026. As more institutions invest and regulatory clarity improves, they believe Bitcoin’s connection to traditional stocks will weaken. In fact, the firm predicts that Bitcoin will be less volatile than even top-performing tech stocks like Nvidia—a massive shift considering Bitcoin’s history of big price swings.

Bitwise sees 2026 as a “trifecta” opportunity for investors: strong returns, lower volatility, and reduced correlation to stock markets.

Looking beyond Bitcoin, Bitwise is also optimistic about Ethereum and Solana. They believe both cryptocurrencies could reach new record highs—but only if the CLARITY Act becomes law. This proposed U.S. bill would provide clear rules for how crypto is regulated, which could help unlock massive potential in areas like tokenization and stablecoins. Bitwise calls these areas “megatrends” and says Ethereum and Solana are best positioned to benefit from them.

The firm also expects crypto-related stocks to outperform traditional tech companies in 2026. Another bold prediction: half of Ivy League university endowments will make investments in crypto assets by then.

In summary, Bitwise believes that 2026 won’t follow the old crypto playbook. Thanks to growing institutional adoption and better regulation, they think it could be a breakout year—not just for Bitcoin, but for the entire digital asset space.