Four Overlooked Catalysts That Could Fuel Crypto’s Next Rally

While the cryptocurrency market has demonstrated impressive growth and reached new highs, many believe positive catalysts are already priced in. However, Matt Hougan is convinced that the main driving forces are still ahead. In his recent analytical report, he highlighted four powerful, underestimated catalysts that could not just support the bull trend but accelerate it to an unprecedented scale. 

Hougan argues that the market underestimates the current cycle’s magnitude. These factors could significantly extend its momentum.

A New Wave of Institutional Investment and Declining Volatility

Matt Hougan, Chief Information Officer at Bitwise , believes the market has not yet fully grasped the potential for an influx of funds from large institutional investors. Since the launch of spot Bitcoin ETFs in early 2024, the crypto market has become much more accessible and appealing to traditional financial players: from family offices and hedge funds to major banks. While this new class of investors moves slowly, their capital is enormous. The market has only seen the “tip of the iceberg”. In his analytical note to clients, Hougan argues that as these investors increase their portfolio allocations, capital inflows into ETFs will accelerate.

This is why Hougan predicts that Bitcoin will reach $200,000 in 2025 and explains that the multi-trillion-dollar institutional wave is just beginning.

One of the key contributing factors is the decline in Bitcoin’s volatility. Hougan notes that BTC’s volatility has fallen to a level comparable to high-risk tech stocks, making it a more acceptable asset for institutional portfolios. Smaller price swings reduce the risks for major players and allow them to consider allocations of 5% or more, whereas before, allocations were typically around 1%. This effect is self-reinforcing: the more institutional money flows into the market, the more stable it becomes, which in turn attracts even more institutional investors.

Government Bitcoin Purchases and ‘Soft’ Monetary Policy

Hougan calls government Bitcoin purchases the “third horseman of Bitcoin demand,” alongside ETFs and corporations. He acknowledges that this catalyst has not yet fully materialized, but its potential is enormous. If even a few countries follow the example of El Salvador and Bhutan and begin adding Bitcoin to their reserves, it could trigger a domino effect. Hougan notes that conversations with central banks, including those in the Czech Republic, show growing interest in Bitcoin as a strategic asset.

I don’t think there will be a flurry of national announcements by year-end, but I suspect there will be enough to establish this as a major potential catalyst for 2026. This realization alone could push prices substantially higher,

Hougan wrote in his letter to Bitwise clients.

Another powerful but underestimated factor, is the shift in US monetary policy. Historically, Bitcoin has shown its best growth during periods of low interest rates and a weakening dollar. Although interest rates are currently at a relatively high level, Hougan predicts that the new US administration will strive for more aggressive rate cuts and a weaker dollar, which, in turn, could drive significant Bitcoin growth. The appearance of “crypto czar” David Sachs in the White House, who will be responsible for developing a regulatory framework, signals the new administration’s serious intentions for integrating cryptocurrencies.

Hougan also sees potential in a resurgence of Initial Coin Offerings (ICOs), but in a more regulated format – the so-called ‘ICO 2.0.’ New SEC initiatives that propose clear rules and “safe harbors” for token sales and airdrops could open the door to a new wave of capital formation for crypto projects. This could become a powerful source of fresh capital and innovation that the market hasn’t yet considered.

Hougan emphasizes that while the current bull trend relies on well-known factors, the real surprises lie in undervalued catalysts not yet priced in. This suggests growth potential may exceed most investors’ expectations.