Author:Fidelity Investments
Compile:NickyForesight News
TL;DR:
Investors who intend to enter the market in pursuit of short-term profits might want to proceed with caution. However, those planning for long-term holdings may still have time. This year, more governments and companies around the world have included digital assets in their balance sheets. Due to this new demand, some investors believe that the traditional four-year cycle of cryptocurrencies may have come to an end.
In March, President Trump signed an executive order establishing a strategic Bitcoin reserve for the U.S. government. The order officially designates all Bitcoin and several other cryptocurrencies currently held by the government as reserve assets.
Although the comprehensive impact of this executive order remains to be seen, 2025 has made one thing clear: cryptocurrencies are gaining mainstream acceptance. It is no longer merely viewed as a volatile form of speculation for "degens" (a shorthand for "degenerate," a term used by cryptocurrency traders to describe themselves due to the wild nature of the crypto market and the mindset required to survive in it), but rather as a means of value storage recognized by the U.S. government.
What does this mean for the cryptocurrency market as we head into 2026? Is the current significant price correction a sign that the bull market has ended? Is it too late to invest in cryptocurrencies now? Here are several key trends to watch.
Will more countries adopt cryptocurrency reserves?
Currently, many countries around the world hold a certain amount of cryptocurrency, but few have officially established cryptocurrency reserves—meaning they have not designated their cryptocurrency holdings as financial assets serving strategic national interests.
This situation began to change in 2025 (the most notable example being President Trump's executive order in March) and is likely to continue advancing in 2026.
For example, in September, Kyrgyzstan passed a bill to establish its own cryptocurrency reserves. Elsewhere, more countries are beginning to explore this possibility. Recently, Brazil's Congress advanced a bill that would allow up to 5% of the country's international reserves to be held in Bitcoin (though it remains to be seen whether this bill will become law).
"Fidelity Digital Assets believes that more countries may purchase bitcoin in the future, based on game theory," said Chris Kuiper, Vice President of Research at Fidelity Digital Assets. "If more countries include bitcoin as part of their foreign exchange reserves, other countries may also feel competitive pressure, thereby increasing the pressure to adopt similar approaches."
What does this mean for the price? "From a simple supply and demand economics perspective, any additional demand for Bitcoin could potentially drive up the price," Kupper said. "Of course, the key is how significant the incremental demand is, and whether other investors are selling or holding."
Will companies continue to purchase cryptocurrencies?
The government is not the only potential source of new demand in 2026. Businesses may also become increasingly involved—some companies have started including Bitcoin and other cryptocurrencies on their balance sheets as early as 2025. One of the most notable examples so far is the software and analytics company Strategy (formerly known as MicroStrategy, ticker symbol MSTR), which has been steadily purchasing Bitcoin since 2020. However, more companies have adopted this practice this year, turning it into a trend. As of November, more than 100 publicly traded companies (both domestic and international) have held cryptocurrencies. Approximately 50 of these companies currently hold more than 1 million Bitcoin.
"There are clearly arbitrage opportunities where some companies can leverage their market position or access to financing to raise funds for purchasing Bitcoin," Kupper said. "Part of this stems from investment mandates as well as geographic and regulatory issues. For example, investors who cannot directly purchase Bitcoin may choose to gain exposure through these companies or the securities they issue."
On the surface, corporate purchases of cryptocurrencies can increase market demand, which helps to push up asset prices. However, investors should also be aware of the associated risks. "If these companies choose or are forced to sell part of their digital assets—especially during a bear market—this could certainly put downward pressure on the prices of Bitcoin or other digital assets they hold," Queup said.
Image source: Fidelity Investments. Past performance does not indicate future results.
Will the four-year cycle come to an end?
Compared to traditional investments such as stocks and bonds, Bitcoin has a relatively short history, but its price has generally followed a four-year cycle (from bull market peak to bull market peak, or from bear market bottom to bear market bottom). It formed bull market peaks in November 2013, December 2017, and November 2021, and bear market bottoms in January 2015, December 2018, and November 2022. These cycles have been accompanied by significant price fluctuations: the first cycle dropped from $1,150 to $152, the second from $19,800 to $3,200, and the third from $69,000 to $15,500.
Bitcoin's price movements often drive the entire cryptocurrency market to follow—often with even more volatility in many cases.
Currently, we are at around the four-year mark of the current cycle, as the previous bull market peaked in November 2021. In the past month, cryptocurrency prices have continued to decline. So, has this bull market already peaked?
If the four-year cycle repeats, we may currently be at or near the end of this Bitcoin bull cycle. However, some cryptocurrency investors believe that this historical pattern is about to end, and the current price correction is merely a temporary pullback before the market resumes its upward trend.
Specifically, what does this mean? Some investors believe that although price pullbacks will still occur, the volatility of any declines will be much lower than in the past, and the magnitude may be so small that it won't feel like a full-blown bear market.Others believe that we may be entering a supercycle, in which the bull market will last for many years. For reference, the commodity supercycle of the 2000s lasted nearly a decade.
Kupiec does not believe these cycles will completely disappear, as the emotions of fear and greed that trigger them have not magically vanished. However, he points out that if the four-year cycle were to repeat, we should have already reached the historical high of this cycle and entered a full-blown bear market. Although the pullback since November has been quite significant, he says we may not be able to confirm whether a true four-year cycle has formed until 2026. The current price decline could be the beginning of a new bear market, or it might simply be a correction within a bull market, followed by a new all-time high in the future—as we have already seen several times in this cycle.
Whether these predictions will come true remains to be seen, and it might take until the middle of 2026 to find out.
Is it still a good time to buy Bitcoin now?
Although the cryptocurrency market still faces many uncertainties, one thing has become clearer: the crypto market is entering a new paradigm. "We are seeing a fundamental shift in the structure and categories of investors, and I believe this trend will continue through 2026," Kaeper said. "Traditional fund managers and investors have started buying bitcoin and other digital assets, but in terms of the amount of capital they could potentially bring into this space, I think we've only scratched the surface."
Given this, investors who have not yet entered the market may wonder: is it still a good opportunity to buy Bitcoin now?
For Kupiec, it depends on your investment horizon. If you're looking to gain returns in the short or medium term—four to five years or less—it might already be too late, especially if this cycle ultimately follows historical patterns.
"However, from a very long-term perspective, I personally believe that if you view Bitcoin as a store of value, you will never be fundamentally 'too late,'" Coepp said. "As long as its hard supply cap remains unchanged, I believe that every purchase of Bitcoin is an investment of your labor or savings into something that won't lose value due to inflation caused by government monetary policies."