The cryptocurrency market is riding near-record levels for Bitcoin BTC/USD and Ethereum ETH/USD, but Bitwise Chief Investment Officer Matt Hougan believes several overlooked factors could still drive prices sharply higher.

What Happened: In a note to clients on Wednesday, Hougan pointed to improving regulatory clarity, growing stablecoin adoption, increased corporate treasury purchases, and steady institutional ETF inflows as widely recognized drivers of the current rally, according to The Block.

He added that Ethereum's renewed momentum has helped reinvigorate altcoin markets.

Yet, according to Hougan, the real upside lies in developments the market has not fully priced in.

One such catalyst is potential government Bitcoin purchases.

Hougan said that while ETFs and corporate treasuries have been aggressive buyers, absorbing far more BTC than has been mined this year, government adoption remains limited.

Recent moves by Pakistan and Abu Dhabi have been small, but Hougan suggested that interest from central banks, including the Czech Republic, could turn into market-moving announcements.

Hougan also noted that Bitcoin's resilience near all-time highs is occurring despite elevated interest rates.

Also Read: Bitcoin Taps $124,000 Overnight But This Solana Setup Is The Real Story

Why It Matters: While traders expect some rate cuts by year-end, he argued that policy signals from the Trump administration suggest a deeper shift toward a weaker dollar and more aggressive easing.

The recent nomination of Stephen Miran to the Federal Reserve, an advocate for substantial rate reductions, could lead to more cuts than markets currently anticipate.

Another factor is Bitcoin's declining volatility since spot ETFs launched in January 2024.

Hougan said this has made Bitcoin comparably stable to certain high-growth tech stocks, encouraging institutional investors to consider portfolio allocations of 5% or more.

ETF inflows have surged, with $5.6 billion recorded since July, and Hougan expects the pace to quicken in the coming months.

Lastly, Hougan highlighted a potential resurgence of initial coin offerings under the SEC's "Project Crypto" initiative, which proposes tailored disclosures and safe harbors for ICOs, airdrops, and network rewards.

If implemented, Hougan sees this framework enabling a new phase of capital formation for crypto projects.

"The market is underestimating the scale of this bull cycle," Hougan said. "These underappreciated catalysts could extend its momentum well beyond current expectations."

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