Bitwise Chief Information Officer Matt Hougan was invited to participate in the cryptocurrency program The Empire, where he conducted an in-depth analysis of Bitcoin (BTC) long-term trends, changes in market structure, and whether there is a risk of being forced to sell Bitcoin by Strategy (formerly MicroStrategy). He pointed out that the 'Bitcoin four-year cycle', which has long been regarded as a benchmark by the market, is gradually losing its dominant power, replaced by the tailwind effect formed by institutional adoption and improvements in the regulatory environment. These forces may continue to drive market development over the next decade. The following is a compilation of key points from the interview.
2026 Bitcoin four-year cycle will end.
Regarding the four-year cycle, Hougan states that from a historical perspective, this cycle has indeed had a significant impact on market volatility in key years such as 2014, 2018, and 2022, and it will play a role again in the dramatic events around 2025. However, he believes that the influence of this cycle is rapidly declining. He does not deny that the four-year cycle existed in the past, but it has completed its phased mission, and at least before 2026, it is unlikely to become a dominant force in the market again.
Hougan emphasizes that several core factors that have driven the four-year cycle, such as supply shocks, rising interest rates, systemic crash events, and market randomness, have clearly weakened. The supply changes brought about by Bitcoin halving account for a decreasing proportion of the overall circulation each year; the global interest rate environment has started to shift towards easing; and after experiencing the Mt. Gox, ICO bubble, and FTX collapse, market infrastructure and risk control capabilities have significantly improved. In his view, the four-year cycle is no longer dominating market trends.
Bitcoin whales use the Covered Call strategy to exchange for stable cash flow.
In response to external doubts about whether whales have been selling off large amounts of Bitcoin at recent highs leading to the crash, Hougan presents another often-overlooked perspective: the Covered Call Option strategy. He points out that many long-term investors holding a large amount of Bitcoin are not directly selling their assets on-chain, but are instead selling call options or futures contracts, giving up some future upside in exchange for stable cash flow. These operations do not reflect in wallet transfer data, but are effectively equivalent to releasing supply into the market.
Hougan states that this type of demand has grown rapidly in recent years, and Bitwise is just one of many organizations providing related services. The overall market scale may have reached tens of billions of dollars, and much of it is completed through over-the-counter transactions and private options markets. He believes this is one of the important background factors for market volatility this year.
Looking ahead to 2026, Hougan clearly states that he does not believe it will be a year of systematic decline. On the contrary, what truly changes the market structure are the unprecedented waves of institutional adoption and regulatory shifts. In the past six months, major financial institutions including Morgan Stanley, UBS, Wells Fargo, and Bank of America have opened or approved cryptocurrency investment services; large donation funds and academic institutions have also continued to increase their allocations. Hougan points out that the volume and influence of these funds far exceed any previous cyclical factors.
Strategy will not sell Bitcoin.
On the issue of whether Strategy could be forced to sell Bitcoin, Hougan clearly denies related claims. He believes that the market's understanding of Strategy's financial structure is overly simplistic. According to actual data, Strategy has annual interest expenses of about $800 million but holds about $14.4 billion in cash, with no short-term liquidity pressure; its total liabilities are about $8 billion, corresponding to about $60 billion in Bitcoin positions, and most of the debt does not need to be repaid before 2027.
Unless the price of Bitcoin drops by 90%, there is almost no possibility of Strategy being forced to sell Bitcoin. Hougan states that even if Strategy no longer plays the role of the main buyer in the future, it does not mean that the market loses support, as new marginal buying comes from large institutions and long-term funds.
And those who just go with the flow, wanting to replicate the methods of Saylor to make a fortune, will eventually disappear. But the problem is that they don't hold much Bitcoin, and their scale is very small. Even if they all sell tomorrow, causing a 4% drop in price, it will return to its previous state; it's not a big deal.
In summary, Hougan believes that the Bitcoin market is transitioning from the early stage of high volatility and four-year cycle-driven phase to a new era dominated by institutional funds and long-term structural factors. For investors, rather than being obsessed with the repetition of historical cycles, it is better to understand the deep transformations occurring in the market.
This article, Bitwise Chief Information Officer Hougan: The Bitcoin four-year cycle will end, Strategy will not sell Bitcoin for debt, first appeared in Chain News ABMedia.
