The cryptocurrency market opened 2026 on a positive note, welcoming the new year with Bitcoin (BTC) and Ether (ETH), the two main coins, rising 7% from January 1 to January 6. Other coins like DOGE also climbed about 26%, signaling a brighter outlook for the crypto market this year compared to the end of 2025.
Matt Hougan, Chief Investment Officer of Bitwise, highlighted three factors in the crypto market expected to drive new highs this year after a strong start.
Back in October 2025, the crypto market was heavily shaken as the U.S.-China trade war intensified. At that time, Bitcoin, which had just reached an all-time high, plunged below $110,000 per BTC. On October 10 alone, the crypto market lost as much as $19 billion due to investor liquidations, and the market continued to decline, ending the year with Bitcoin valued around $88,000 (Bitcoin valuation based on data fromCoinMarketCap).
Later, around November last year, market sentiment still worried investors about the possibility that major crypto players with significant influence on price and liquidity, including various funds, might be squeezed, potentially triggering ongoing sell-offs.
Matt Hougan noted that since the start of the year, these concerns have eased. He expects that any major portfolio reductions or position closures likely occurred before year-end, and the current market picture indicates investors have moved past those pressures.
The second factor, Matt Hougan explained, is the pending U.S. crypto market regulatory legislation set to be introduced to Congress early this year, with the Senate Banking Committee expected to begin review in mid-January.
This process remains lengthy and involves multiple steps, with ongoing debate over stablecoin regulations. If passed, this legislation would be a positive milestone for the crypto industry, as failure to approve it leaves uncertainty whether future administrations will prioritize this market.
Finally, Matt Hougan emphasized that the crypto market still depends somewhat on stock market stability. Although digital assets do not always move in sync with stocks, he gave the example that a sell-off in the S&P 500 could pressure risk assets like cryptocurrencies.
Meanwhile, prediction markets suggest a low likelihood of recession this year and a strong chance of stock market gains, though external factors must still be watched closely.
Overall, Bitwise data indicate the crypto market environment remains conducive to growth due to increasing institutional acceptance, expanding stablecoin use and tokenization, and positive regulatory developments. If policy progress continues and financial markets remain supportive, Bitwise believes crypto momentum from early 2026 could be sustained long-term.
Source:CoinDesk,CoinMarketCap
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