Bitwise: Institutional ETF Flows Could Drive Bitcoin to New All‑Time Highs in 2026

Bitwise CIO Matt Hougan forecasts Bitcoin (BTC) may reach new all‑time highs in 2026, driven less by traditional four‑year cycle mechanics and more by sustained institutional adoption via spot Bitcoin ETFs and improving regulation. The firm argues the halving’s price impulse is weakening, macro conditions (notably interest rates) are likely to ease in 2026, and leverage was reduced after 2025 liquidations — all of which lower systemic tail risk. Crucially, Bitwise points to accelerating institutional allocation following 2024 spot‑BTC ETF approvals and over $20 billion in ETF assets-to-date. Major wealth managers and banks (Morgan Stanley, Wells Fargo, Merrill) are expected to increase allocations in 2026, potentially bringing tens of billions of new capital. Bitwise expects ETF inflows and clearer legislation to broaden the investor base, reduce BTC’s correlation with equities, and lower annualized volatility to below 50%, which could extend and smooth future bull phases. The report also highlights potential spillovers to other large crypto assets (ETH, SOL) if U.S. regulatory clarity — including proposals like the CLARITY Act on tokenization and stablecoins — advances. Key trade takeaways: monitor spot‑BTC ETF flows and AUM trends, regulatory developments (CLARITY Act and SEC guidance), shifts in BTC volatility and equity correlation, and institutional custody/allocations; these factors will affect position sizing, risk management, and timing for medium‑ to long‑term BTC exposure.