Bitwise Warns of a Challenging Summer Ahead for Bitcoin

The cryptocurrency market might encounter challenges this summer if the U.S. Congress fails to continue working on relevant legislation, according to Matt Hougan, Chief Investment Officer at Bitwise.

“My baseline expectation is that most crypto assets will reach new all-time highs this year, with Bitcoin surpassing $200,000. But… I’m frequently asked what could derail that. The answer is straightforward: people. More specifically, politicians,” he wrote in his weekly memo to investors.

Hougan pointed out that the market has been rising since the presidential elections in November 2024, fueled by expectations of favorable regulatory changes. Many of those expectations have been met, particularly during the first 100 days of the Trump administration, but all these developments originated from the White House and could potentially be reversed by the next administration.

“To advance the crypto industry, we need Congress to solidify this progress through legislation. Passing at least one cryptocurrency bill would demonstrate that both Democrats and Republicans can come together on this issue, making it harder for future administrations to reverse course,” emphasized Hougan.

He anticipates that the first such legislative act will be a stablecoin regulation bill. In March, the GENIUS Act received approval from the Senate Banking Committee. However, last weekend, Democratic representatives withdrew their support.

Officially, they cited insufficient AML/KYC measures in the bill. Yet, Hougan believes the underlying reason is the declining approval ratings of President Donald Trump and discussions around a potential conflict of interest regarding the president’s involvement in cryptocurrency projects.

According to Hougan, the GENIUS Act could create a “solid regulatory pathway” for major financial players to enter the digital asset market. However, efforts to expand its scope beyond just stablecoins have not yet aided the document’s progress.

“I believe that a stablecoin bill will eventually be passed. It’s too beneficial—for the U.S., the dollar, and for businesses—to be significantly slowed down by behind-the-scenes maneuvering in Congress,” Hougan suggested.

The coming weeks will be critical for the legislation, and should it advance, the bullish cryptocurrency market will be “unstoppable,” he believes.

It’s worth noting that Bitwise experts have identified favorable regulation in the U.S. as one of the potential drivers for Bitcoin’s growth in the second quarter.