Crypto markets need to pass three so-called checkpoints in order to reach new peaks in 2026, which include the US Senate passing a highly-anticipated crypto bill, says Bitwise chief investment officer Matt Hougan.
“Crypto is off to a good start in 2026,” Hougan said in a note on Tuesday, but added there are “three big hurdles standing between us and new all-time highs.”
Markets are currently down 2% over the past 24 hours, but have gained 5.6%, or around $170 billion, since the beginning of the year, pushing total capitalization to a seven-week high of $3.3 trillion on Wednesday.
Hougan said that the Oct. 10 market meltdown, which wiped out $19 billion in futures positions in a single day, caused investors to worry that a major market maker or hedge fund would have to wind down.
“These potential sales hung over the market like a heavy fog,” preventing a rally in late 2025, he said.
“One of the reasons I think we’ve rallied to start this year is that investors have put October 10 in the rearview.”
Crypto markets shed over $1.2 trillion following the Oct. 10 crash but have shown signs of recovery in January. Source: Coingecko
CLARITY Act progressing through Congress
The US Senate is targeting Jan. 15 for a markup of the CLARITY Act, a process that involves aligning drafts in the Senate Banking and Agriculture committees and pushing the final bill to a vote.
“Passage of the CLARITY Act is key to the long-term future of crypto in the US [and would] enshrine core principles into law and provide a strong foundation for future growth,” Hougan said.
Related: US lawmakers expected to address market structure markup in January
The third “checkpoint” is for the broader equity market to stay intact. Crypto is not highly correlated with stocks, “but a sharp collapse would take the shine off of all risk assets in the short term, crypto included,” Hougan added.
“If we hit the three milestones above, I think 2026’s early momentum will have some serious legs.”
Dovish Fed good for long-term gains
Hougan did not mention US central bank monetary policy, rate cuts, or liquidity as potential drivers of crypto markets, but other experts have.
“The consensus going into 2026 seems to be that the US will run it hot, from a combination of fiscal policy and a dovish Fed,” Jurrien Timmer, the director of global macro at Fidelity, said on Wednesday.
The Federal Reserve has signaled no immediate rate cut as it approaches its next meeting on Jan. 28, Nick Ruck, director of LVRG Research, told Cointelegraph.
“This environment supports continued risk-on sentiment in the near term for crypto markets, but highlights growing sensitivity to continued inflation risks and potential policy pauses that could cap upside in digital assets,” he added.
According to CME futures markets, there is currently an 89% probability that rates will remain unchanged at the end of this month.
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