Amid an enthusiastic yet risk-laden cryptocurrency market, Bitwise CIO Matt Hougan highlights four potential catalysts that could boost prices further by year-end, as detailed in his client note released on August 13th. At a time when Bitcoin 
$91,081 and Ethereum 
$3,094 are trading near historic highs, Hougan emphasizes developments that could unexpectedly impact the market. He asserts that markets often react to good news that hasn’t been factored into prices yet.
Significant Catalyst: Government Purchases
The first catalyst Hougan points to is the purchase of Bitcoin by governments. While ETFs and corporate investments have so far dominated the demand landscape, with ETFs amassing 183,126 BTC and corporations securing 354,744 BTC, government involvement remains minimal. The U.S.’s Strategic Bitcoin Reserve is limited to seized assets, and recent decisions by Pakistan and Abu Dhabi reflect only small-scale investments. Nevertheless, discreet actions by countries like the Czech Republic could pivot expectations significantly, potentially adding strength to Bitcoin and altcoin prices.
Hougan stresses that a few robust announcements could quickly recalibrate market expectations and drive momentum in 2026. This potential, even if merely acknowledged, could infuse additional strength into the prices of Bitcoin and alternative cryptocurrencies.
Monetary Policy, Volatility, and ICO 2.0
The second catalyst is central banks’ monetary policies. Hougan notes the unusual situation of Bitcoin remaining near its peak in a high-interest environment. While modest interest rate cuts are anticipated by year-end, unpriced factors include signals from the Trump administration and the Fed’s dovish stance under Stephen Miran’s “Mar-a-Lago Accord.” If the market witnesses more aggressive rate cuts, Hougan believes Bitcoin could experience significant upward movement.
As a third catalyst, Hougan foresees a sharp decline in Bitcoin’s volatility following the introduction of spot ETFs in January 2024. A downturn in volatility to levels akin to high-tech stocks could facilitate institutional portfolio allocations of 5% or higher. The substantial net inflow of $5.6 billion into ETFs since July suggests increased flows in the fall.
The fourth could be ICO 2.0. Despite past issues, SEC Chairman Paul Atkins’ “Project Crypto” promises clarity and exemptions for ICOs, AirDrops, and network rewards. Hougan believes this initiative will trigger new capital influx and potentially revive an issuance cycle within the cryptocurrency market.
