Bitcoin and crypto market could surge higher due to these four untapped developments: Bitwise

The crypto market could witness a strong uptrend in the coming months from four key price catalysts, including government demand, a weak US Dollar, low volatility, and potential rebirth of the ICO market, according to Bitwise CIO Matt Hougan in a report on Wednesday.

Crypto could see further upside with four growing developments

The crypto market is yet to capitalize on four opportunities that could be potential triggers for price growth, Hougan stated in a note to investors on Wednesday.

Although Bitcoin (BTC) and Ethereum (ETH) continue to hover near their record highs, Hougan suggests that these "four big developments" are yet to be priced in by market participants.

Firstly, he highlighted that more governments and nations will start adding crypto to their reserve assets. Investors had earlier anticipated demand from government, corporate treasuries, and exchange-traded funds (ETFs) to be "The Three Horsemen of Bitcoin Demand," due to their capacity to drive prices higher.

"So far, two of those horsemen have delivered: ETFs have purchased 183,126 BTC, while public corporations have gobbled up 354,744 BTC," Hougan stated.

However, demand from government reserves has been weak, causing several experts to play down their potential impact on prices. This notion was reinforced by US Treasury Secretary Scott Bessent, who stated in an interview with FOX Business on Thursday that the government won't be purchasing Bitcoin directly. He said the US Strategic Bitcoin Reserve will rely on BTC forfeited to the federal government.

On the contrary, Hougan argues that governments typically move more slowly on such initiatives compared to corporate treasuries or exchange-traded funds (ETFs). 

While current steps by the US, Pakistan, and Abu Dhabi to establish crypto reserves are negligible compared to ETF flows and BTC treasury demand, Hougan expects more countries to join the trend before the year's end.

"I don't think there will be a rush of national announcements by year-end, but I do suspect there will be a few more — enough to establish this as a major potential catalyst for 2026," wrote Hougan. "That realization alone could push prices substantially higher."

Weak dollar favors higher BTC prices

Another factor is the influence that a potential interest rate cut could have on Bitcoin's price. Hougan noted that the top crypto has shown resilience, trading near all-time highs despite interest rates climbing to levels not seen since Bitcoin's creation in 2009.

The report highlights President Trump's appointment of Stephen Miran, who strongly advocates for a weak dollar, to the Federal Reserve board, and several rate cuts before year-end, as strong price catalysts.

"If we get much lower rates and a much weaker dollar due to money printing, Bitcoin could trade significantly higher," stated Hougan.

The Bitwise CIO also expressed that the decline in Bitcoin's volatility, especially since the launch of spot BTC ETFs in January 2024, has increased the chances of its allocation in institutional portfolios.

"This is a big part of the reason why bitcoin ETF flows are accelerating (they've done $5.6 billion in net flows since July 1, which would work out to close to $50 billion in flows over a year)," the report states.

Hougan added that this trend could accelerate in the fall due to ETFs traditionally seeing weaker flows during the summer.

Lastly, the report highlights how SEC Chair Paul Atkins' "Project Crypto" roadmap could create a potential regulated "ICO Market 2.0" era that could attract huge capital into the market.