Crypto Markets Eye New Highs in 2026, But Three Key Checkpoints Stand in the Way
Crypto markets are off to a promising start in 2026, with a 5.6% gain year-to-date, pushing total capitalization to a seven-week high of $3.3 trillion. However, according to Matt Hougan, Bitwise’s chief investment officer, three major hurdles must be overcome to reach new all-time highs. These checkpoints include the US Senate’s passage of the highly anticipated CLARITY Act, the broader stock market remaining intact, and the resolution of concerns surrounding a potential market maker or hedge fund shutdown.
The crypto market’s rally earlier this year can be attributed, in part, to investors putting the October 10 market collapse on the back burner. The collapse wiped out $19 billion in futures positions in a single day, sparking worries about a major market maker or hedge fund shutting down. Hougan notes that these potential sales “hung like a thick fog over the market” and prevented a rally in late 2025. The market has since shown signs of recovery, with crypto markets losing over $1.2 trillion after the October 10 crash but gaining momentum in January.
The US Senate aims to pass the CLARITY Act on January 15th, which would enshrine fundamental principles in law and create a solid foundation for future growth. Hougan emphasizes that the passage of this act is key to the long-term future of crypto in the US. Additionally, US lawmakers are expected to take up the market structure surcharge in January, which could further impact the crypto market.
Broader Stock Market and Monetary Policy
The broader stock market remains a crucial factor in the crypto market’s performance. Although cryptocurrencies are not highly correlated with stocks, a sharp drop in the stock market would likely take the shine off all risk assets, including cryptocurrencies, in the short term. Hougan notes that if the three milestones are achieved, the early momentum of 2026 will make serious progress.
Experts, such as Jurrien Timmer, director of global macro at Fidelity, believe that a dovish Fed and a combination of fiscal policy will support the US economy and, in turn, the crypto market. The Federal Reserve has not announced an immediate rate cut before its next meeting on January 28, and according to CME futures markets, there is currently an 89% chance that rates will remain unchanged at the end of this month. Nick Ruck, director of LVRG Research, notes that this environment supports continued risk sentiment in crypto markets in the near term but highlights growing sensitivity to ongoing inflation risks and possible policy pauses that could limit upside potential in digital assets.
Conclusion and Future Outlook
In conclusion, the crypto market’s path to new all-time highs in 2026 is contingent upon overcoming the three key checkpoints: the passage of the CLARITY Act, the broader stock market remaining intact, and the resolution of concerns surrounding a potential market maker or hedge fund shutdown. As the market continues to evolve, it is essential to stay informed about the latest developments and their potential impact on the crypto market. For more information, visit https://cointelegraph.com/news/3-checkpoints-stand-between-crypto-and-all-time-highs-in-2026-bitwise
