Bitwise CIO: Three Major Challenges Facing the Crypto Market in 2026

Foresight News reported, according to The Block, that Bitwise Chief Investment Officer Matt Hougan analyzed that the crypto market had a strong start in early 2026, but whether the rally can be sustained depends on overcoming three key obstacles. Hougan noted that both bitcoin and ethereum have risen about 7% year-to-date, while more speculative assets like dogecoin have seen even greater gains. However, prices pulled back on Wednesday, raising questions in the market about whether the New Year rally can continue.

He pointed out that the first obstacle has already been cleared, which is avoiding large-scale market volatility similar to the market crash on October 10 last year, an event that led to at least $2 billion in crypto futures positions being liquidated in a single day. He stated that while concerns about major market makers or hedge funds potentially being forced to liquidate had put pressure on prices last year, these worries have gradually eased as the year came to an end.

In Hougan's view, the second obstacle is related to U.S. legislation, especially the crypto market structure bill known as the "Clarity Act." The bill is advancing in Congress and is expected to be revised in the Senate on January 15, although there are still disagreements on issues such as DeFi regulation, stablecoin incentives, and conflicts of political interest. The final factor is the broader stock market. Hougan stated that the performance of cryptocurrencies does not require a booming stock market, but he warned that a stock market crash could drag down all risk assets in the short term.