Crypto markets must clear three key “checkpoints” before reaching fresh all-time highs in 2026, including the passage of a long-anticipated crypto bill by the US Senate, according to Bitwise chief investment officer Matt Hougan.
In a note on Tuesday, Hougan said crypto has started 2026 on a positive footing, but cautioned that “three major hurdles still stand between us and new all-time highs.”
Despite markets being down 2% over the past 24 hours, total crypto market capitalization has climbed 5.6% since the start of the year — an increase of roughly $170 billion — reaching a seven-week high of $3.3 trillion on Wednesday.
Hougan also pointed to the Oct. 10 market sell-off, which erased $19 billion in futures positions in a single day, as a key source of lingering investor anxiety. He said the event raised concerns that a major market maker or hedge fund might be forced to unwind positions, with the overhang of potential selling acting “like a heavy fog” that capped rallies toward the end of 2025.
“One of the reasons I think we’ve rallied to start this year is that investors have put October 10 in the rearview.”
CLARITY Act moves forward in Congress
The US Senate is aiming for a Jan. 15 markup of the CLARITY Act, a step that involves reconciling versions from the Senate Banking and Agriculture committees before advancing the finalized legislation to a full vote.
Hougan said the passage of the CLARITY Act would be critical for crypto’s long-term prospects in the United States, noting that it would codify key principles into law and establish a solid framework to support future industry growth.
The third “checkpoint,” according to Hougan, is stability in the broader equity market. While crypto does not have a strong correlation with stocks, he cautioned that a sharp equity market downturn would dampen sentiment across all risk assets in the short term — including crypto.
“If we hit the three milestones above, I think 2026’s early momentum will have some serious legs.”
A dovish Fed could support long-term upside
While Hougan did not point to US monetary policy, interest rate cuts, or liquidity conditions as key drivers for crypto, other analysts believe they could play an important role in 2026.
Jurrien Timmer, Fidelity’s director of global macro, said on Wednesday that the prevailing view heading into 2026 is that the US economy will be allowed to “run hot,” fueled by a mix of fiscal stimulus and a dovish Federal Reserve.
However, the Fed has signaled no immediate plans to cut rates as it heads into its Jan. 28 meeting, according to Nick Ruck, director of LVRG Research. Ruck said the current backdrop favors near-term risk-on sentiment in crypto markets but warned that persistent inflation risks and the possibility of policy pauses could limit upside for digital assets.
Data from CME futures markets shows an 89% probability that interest rates will remain unchanged at the end of January.
