Bitwise Identifies Three Tests for Crypto’s 2026 Rally

Bitcoin and ether have started 2026 on a strong note, but maintaining momentum will depend on market stability, U.S. legislation, and equity markets, according to crypto asset manager Bitwise.

In a blog post Tuesday, Bitwise highlighted that bitcoin (BTC $91,452) and ether (ETH $3,170) are both up roughly 7% year-to-date, while speculative tokens are climbing faster—Dogecoin (DOGE $0.146) has gained around 29%, signaling a return of risk appetite.

Bitwise CIO Matt Hougan outlined three key conditions for a sustained rally. The first may already be behind the market: avoiding another major shock like the October 10, 2025 liquidation event, which wiped out $19 billion in crypto futures in a single day. Early 2026 strength suggests the market has moved past lingering concerns over forced unwindings by large players.

The second test is Washington. Proposed crypto legislation is advancing in Congress, with a Senate Banking Committee markup tentatively set for mid-January. Passage would be a critical milestone, while failure could reverse today’s relatively pro-crypto regulatory stance.

The third factor is equities. A sharp selloff—such as a 20% S&P 500 drop—could pressure crypto, even though digital assets are not tightly correlated with stocks.

Bitwise remains constructive, citing institutional adoption, stablecoin growth, tokenization, and regulatory progress as supportive factors. If policy and markets align, crypto’s early 2026 momentum could be sustainable.