Crypto’s Path to New All-Time Highs in 2026 Hinges on Three Key Milestones, Says Bitwise CIO

Crypto markets have entered 2026 with renewed momentum, but new record highs are far from guaranteed. According to Matt Hougan, Chief Investment Officer at Bitwise, the asset class must clear three major “checkpoints” before a sustained rally can take hold.

In a note released Tuesday, Hougan said that while sentiment has improved following recent market stabilization, unresolved risks—regulatory, structural, and macroeconomic—still loom large.

“Crypto is off to a solid start this year,” Hougan wrote, “but there are three big hurdles standing between current levels and new all-time highs.”

Crypto Market Update: Recovery Gains Traction

Despite a 2% dip over the past 24 hours, the broader crypto market has climbed approximately 5.6% since the start of the year—adding nearly $170 billion in total value. According to CoinGecko data, global crypto market capitalization reached a seven-week high of $3.3 trillion on Wednesday.

This rebound follows one of the most severe liquidations in crypto history.

Checkpoint One: Putting the October Liquidation Behind Us

Hougan identified the October 10 market crash as the first major psychological barrier. On that day, roughly $19 billion in crypto futures positions were liquidated, triggering fears that a major market maker or hedge fund might collapse.

Those concerns, Hougan said, acted as a persistent drag on prices through the end of 2025.

“Potential forced selling hung over the market like a heavy fog,” he noted, adding that the recent rally suggests investors are increasingly confident that systemic risk from the event has passed.

Although crypto shed more than $1.2 trillion in market value following the crash, January’s recovery indicates growing stability.

Checkpoint Two: Passage of the CLARITY Act

The second—and arguably most important—milestone is regulatory clarity in the United States.

The U.S. Senate is targeting January 15 for a markup of the long-awaited CLARITY Act, which aims to define regulatory jurisdiction and establish clear rules for digital assets. The process involves reconciling versions from the Senate Banking and Agriculture Committees before advancing the bill to a full vote.

“Passage of the CLARITY Act is critical to the long-term future of crypto in the U.S.,” Hougan said. “It would enshrine core principles into law and provide a durable foundation for growth.”

Market participants widely view regulatory certainty as a prerequisite for deeper institutional adoption.

Checkpoint Three: Equity Markets Must Hold Steady

Hougan’s final checkpoint lies outside the crypto ecosystem itself.

While crypto is not perfectly correlated with equities, a sharp downturn in stock markets would likely undermine risk appetite across all asset classes.

“A significant equity market collapse would take the shine off risk assets in the short term—crypto included,” Hougan warned.

In short, crypto’s upside potential in 2026 may depend as much on Wall Street’s stability as on blockchain fundamentals.

The Fed Factor: A Quiet but Powerful Influence

Although Hougan did not cite monetary policy as a primary driver, other analysts believe it could play a decisive supporting role.

Jurrien Timmer, Director of Global Macro at Fidelity, said expectations are building that the U.S. economy will remain expansionary due to a combination of fiscal stimulus and a more accommodative Federal Reserve.

Meanwhile, CME futures data shows an 89% probability that the Federal Reserve will hold interest rates steady at its January 28 meeting. According to Nick Ruck, Director of LVRG Research, this environment favors risk assets—but also increases sensitivity to inflation and policy shifts.

Conclusion: Momentum Is Building, but Conditions Matter

Crypto’s early-2026 rebound has restored optimism, but Bitwise’s analysis suggests that new all-time highs will require more than momentum alone. Regulatory progress, market stability, and supportive macro conditions must align.

“If we clear these three milestones,” Hougan said, “I think this year’s early momentum will have real staying power.”

For investors, the message is clear: the path forward looks promising—but patience and vigilance remain essential.

See all our insights: Bitcoin World News