- Hougan says crypto entered a prolonged winter in Jan 2025, with BTC down 39% and ETH down 53% from cycle highs.
- He sees new cycle drivers in blockchain revenue, AI-driven finance, and stablecoins scaling from billions to trillions.
- Institutional adoption, regulation, tokenization, DeFi growth, and Ethereum’s renewed focus shape the next market phase.
Crypto markets remain under pressure, yet new themes are already taking shape, according to Bitwise CIO Matt Hougan. In recent commentary shared publicly in late January 2026, Hougan outlined nine narratives he believes could shape the next market cycle. His remarks come as prices remain well below prior highs and investors reassess long-term drivers following a prolonged downturn.
Hougan Says Crypto Winter Began Earlier Than Believed
Before outlining future themes, Hougan addressed current market conditions. According to Hougan, the crypto market entered a sustained winter starting January 2025. He said the downturn unfolded gradually across global markets.
Bitcoin has fallen about 39% from its October 2025 all-time high, Hougan noted. Ethereum dropped roughly 53% over the same period. Many other digital assets declined even further.
Hougan said falling prices, leverage unwinds, and profit-taking drove the slide. He compared the pattern to prior bear markets in 2018 and 2022. He cited price data, ETF flows, and investor behavior to support the assessment.
Revenue, AI, and Stablecoins Lead Emerging Themes
Looking ahead, Hougan outlined several narratives gaining attention. First, he pointed to revenue generation. According to Blockworks data cited by Hougan, blockchains generate $7 billion to $8 billion annually. He said that figure could reach hundreds of billions as adoption expands.
Next, Hougan highlighted AI-driven finance, or AiFi. He said AI agents will rely on crypto, stablecoins, and DeFi rather than bank accounts. He also referenced Ray Dalio’s view that weakening fiat currencies could increase demand for hard assets, including Bitcoin.
Hougan further cited Treasury Secretary Scott Bessent’s comments on stablecoins. He noted stablecoin assets have paused near $300 billion but could grow into the trillions as global payment rails.
Institutions, Regulation, and Tokenization in Focus
Institutional adoption remains another major theme, Hougan said. He described it as a decade-long trend measured in trillions, not a short-term cycle.
He also referenced regulatory progress. Hougan said benefits from clearer rules remain ahead, with the Genius Act not taking effect until January 2027. He added that clearer frameworks could accelerate investment and adoption.
Tokenization also featured prominently. Hougan noted only about $20 billion in assets are tokenized today, compared with trillions across equities, bonds, and real estate.
Finally, Hougan mentioned DeFi growth and Ethereum’s renewed focus under Vitalik Buterin, describing the moment as a turning point for the network.