Bitcoin has finally broken past last year’s low of near 80,000 and rallied in early 2026, trading around $93,300 after briefly hitting $97,000.
The nearly 7% year-to-date gain has also driven other cryptos with it and brought the largest digital currency closer to a level that has capped previous rallies since November.
According to analysts from NYDIG Research and market maker Wintermute, the price increase so far has been driven mainly by geopolitical risks and a structural shift in how capital flows through the crypto market. The latter is also among the three major catalysts that could push prices beyond current levels.
Before getting into what these catalysts are, let’s look at why the cryptos are rallying this year after last year’s boring price action.
According to NYDIG Research’s Greg Cipolaro, the most significant short-term driver has been the political instability in the United States.
He pointed out the ongoing tension between Donald Trump and his criticism of the Federal Reserve and its Chair, Jerome Powell, who refused to cut interest rates at the president’s demand. Cipolaro drew comparisons to past political interference in U.S. monetary policy, specifically Richard Nixon’s pressure on the Fed ahead of the 1972 election.
“History shows that political meddling in monetary policy is almost invariably bad – higher inflation, damaged central bank credibility, and weaker currencies are typical byproducts,” he wrote.
Bitcoin, a non-sovereign asset with a fixed supply, may be benefiting from investor concerns about similar risks unfolding today.
Cipolaro also noted the broader macro environment as one of the reasons prices found support. The global money supply has reached an all-time high, and while precious metals, including gold, silver, platinum, and palladium, skyrocketed, BTC, as “digital gold,” seemed left behind.
“Although our analysis indicates that gold and bitcoin respond to distinct macro dynamics, with effectively zero correlation between them, both highlight a broader reality: at a global scale, truly non-sovereign stores of value are exceedingly rare,” Cipolaro wrote, suggesting BTC may now be catching up.
There’s also a reduction in “overhangs.” Tax-loss selling, in which investors sell their assets at a loss to reduce gains recognized on other assets, ended at the turn of the year.
Another overhang that ended came after the October 10 liquidations, which, according to BitMEX Research, left exchanges with unhedged long positions after their auto-deleveraging engines liquidated traders. As exchanges sold these long positions, prices remained down.
And then there is the ongoing debate over bitcoin’s “four-year” halving cycle and whether it’s dead. A halving is an event in which the reward for verifying new blocks on the Bitcoin blockchain is cut in half. It happens every 210,000 blocks, roughly every 4 years, during which bitcoin historically experiences boom-and-bust cycles.
Market observers will point out that bitcoin, and by extension the wider crypto market, have seemingly been trading in a four-year cycle, in which BTC pumps shortly after the halving, leading the wider market to rise. This fuels speculative mania, which then ends up in a bear market that ends before the next halving.
According to Wintermute, that four-year crypto market cycle may be over.
“The four-year cycle is dead,” the firm wrote in a recent note on X. “2025 did not deliver the anticipated rally, but it may mark what we look back on as the beginning of crypto’s transition from speculation to a more established asset class.”
Historically, crypto-native wealth acted as a rotating pool. Bitcoin gains flowed into ether, then into other blue-chip altcoins, and eventually into more speculative tokens in what’s become known as “altseason.”
That transmission mechanism appears to have broken down, according to Wintermute’s OTC flow data.
The firm cited a major structural change: the rise of institutional products like exchange-traded funds (ETFs) and digital asset trusts (DATs).
“ETFs and DATs evolved into ‘walled gardens.’ They provide sustained demand for large-cap assets but don’t naturally rotate capital into the wider market,” Wintermute wrote.
In 2025, altcoin rallies averaged just 20 days, down from more than 60 in 2024, the firm noted. A handful of major assets absorbed the vast majority of new capital, while most of the market struggled to sustain momentum.
Retail interest also shifted elsewhere. “With retail interest diverted toward equities, 2025 became a year of extreme concentration,” Wintermute added, referencing investor attention focused on AI, rare earths, and quantum computing stocks.
This rotation of capital is what Wintermute sees as the main driver, among the three other big catalysts, for the price to move higher for this year.
According to the market maker, institutional vehicles, such as ETFs and treasury firms, need to include a broader set of digital assets to drive larger price movements. Early signs of this are already visible in the market, with spot SOL and XRP ETFs trading and filings for ETFs tied to various altcoins under review.
Then there is the return of the wealth effect, where a strong BTC or ETH rally could generate capital for investors, which can then spill over into the broader altcoin market.
A final catalyst would be retail investors rotating back from equities into the cryptocurrency space, bringing new stablecoin inflows and renewed risk appetite.
“How much capital ultimately flows back into digital assets remains uncertain,” Wintermute said. “Outcomes will depend on whether one of these catalysts meaningfully broadens liquidity beyond a handful of large-cap assets, or whether concentration persists.”
