Bitcoin Plunge: Bitwise CIO Cites 'the Four-Year Cycle' As No. 1 Reason for Losses

Why It Matters

The analysis underscores how cyclical dynamics and asset‑allocation shifts can reshape crypto exposure, influencing the growth trajectory of crypto‑focused ETFs and broader institutional investment strategies.

Key Takeaways

• Bitcoin dropped below $61,000, 16‑month low
• Bitwise CIO cites four‑year crypto cycle
• Investors shifting to gold and AI stocks
• Crypto‑ETF growth persists despite price weakness
• Bitwise $15B AUM, Solana ETF down 57%

Pulse Analysis

The recent Bitcoin correction aligns with a historically observed four‑year cycle tied to the network’s halving events, which traditionally compress supply and trigger price volatility. Analysts trace three prior cycles where Bitcoin surged to new highs before retreating, and the current dip mirrors those patterns. This cyclical lens helps investors differentiate between temporary retracements and structural market shifts, especially as macro‑economic variables like inflation expectations and monetary policy evolve.

Beyond price movements, the correction is reshaping capital flows within the crypto ecosystem. Institutional players, exemplified by Bitwise Asset Management’s $15 billion under management, are increasingly channeling funds through regulated exchange‑traded products rather than direct holdings. The launch of the Bitwise Solana Staking ETF, despite its steep early losses, signals confidence in diversified crypto exposure. Meanwhile, investors are reallocating toward perceived safe‑havens such as gold and high‑growth AI equities, reflecting a broader risk‑off sentiment that could temper demand for pure‑play Bitcoin assets.

Looking ahead, the interplay between market cycles, regulatory scrutiny, and macro‑policy risk will dictate the pace of crypto‑ETF adoption. Hougan’s remarks about the “self‑fulfilling prophecy” suggest that while short‑term price swings may affect intraday trading, the finite supply of 21 million Bitcoin ensures enduring demand for spot exposure. However, factors like the pending Federal Reserve nominee and potential quantum‑computing threats add layers of uncertainty. Investors should monitor both the cyclical timeline and the evolving regulatory landscape to gauge the long‑term viability of crypto‑centric investment vehicles.

Bitcoin plunge: Bitwise CIO cites 'the four-year cycle' as No. 1 reason for losses

By Blair Bao · Published Tue, Feb 10 2026 2:58 PM EST

A multibillion‑dollar crypto asset manager cites several reasons for the Bitcoin plunge, but he’s listing “the four‑year cycle” as the No. 1 downward catalyst.

According to Matt Hougan, chief investment officer at Bitwise Asset Management, it’s a phenomenon that has occurred three other times in the crypto market.

“People are looking for one thing to blame for the current retracement in Bitcoin. But there is not any one thing to blame,” he told ETF Edge on Monday.

Hougan contends investors have been favoring other hot investments—including gold and artificial‑intelligence stocks—over cryptocurrencies, too.

“There is some quantum risk. There is fear of Fed nominee Kevin Warsh,” he said. “In bear markets, all these things are amplified.”

When he was on ETF Edge last November, Bitcoin had fallen below the $90,000 mark for the first time since April. Its record high of $126,279 was hit in October.

Crypto‑ETF disruption?

Bitcoin weakness, however, shouldn’t ultimately disrupt the rise of exchange‑traded funds specializing in crypto, according to Hougan, who thinks a “self‑fulfilling prophecy” is dominating the market right now.

“There is good news underneath the surface. It’s just slow to materialize. So, I don’t think this sort of financialization of Bitcoin fundamentally changes the scarcity argument,” Hougan said. “It may change some intraday movements or short‑term trading dynamics, but it doesn’t change the sort of fundamental fact there are only 21 million Bitcoin. All that derivative demand has to pass through eventually to the spot market.”

His firm, which has more than $15 billion in assets under management, is heavily involved in crypto ETFs. It launched the Bitwise Solana Staking ETF, which tracks the price of the cryptocurrency Solana, on Oct. 28. The fund is down about 57 % since launch, and so far this year the cryptocurrency is off more than 30 %.

Meanwhile, Bitcoin tumbled below $61,000 last Thursday—its lowest level in roughly 16 months.

Disclaimer: The views expressed are those of the interviewee and do not constitute investment advice.