The three fundamental pillars of the crypto bull run: what Bitwise analysis reveals

A sustained crypto bull run in 2025 cannot rely solely on fleeting speculative waves. According to a recent analysis by Bitwise’s Chief Investment Officer, the digital market requires three well-defined structural conditions to maintain long-term growth.

Matt Hougan, a key figure in professional digital asset management, has published detailed assessments outlining the necessary path for the crypto bull run to develop steadily. His perspective combines rigorous analysis with observations of historical cycles, providing a particularly useful framework for those operating in digital markets.

The First Pillar: Containing Liquidation Shocks

The pressure from massive liquidations is the first critical obstacle. In the context of a crypto bull run, events similar to October 2024 can violently disrupt the positive trajectory. At that time, about $19 billion in derivative positions were forcibly closed, triggering a cascade of sales on major digital assets.

Hougan identifies these shocks as the main brake on the continuation of the bull market. However, current data indicate that the specific pressure from that period has significantly decreased. Most forced liquidations were completed before the end of 2024, reducing the risk of further short-term declines.

What does this attenuation mean? Simply put, the foundation for supporting the crypto bull run is now more stable. Investors no longer face constant fears of crashes caused by excessive leverage in derivatives markets. However, this condition remains fragile: new accumulations of uncovered positions could recreate vulnerabilities.

The Second Pillar: Regulatory Certainty in Major Markets

Transparent legislation is the second essential element for a mature and lasting crypto market. Hougan clearly emphasizes that regulatory ambiguity has historically limited institutional capital flows into digital assets.

In the U.S., comprehensive legislation on the crypto market structure would provide the certainty sought by large funds and asset managers. This concerns not only trading but also custody standards, consumer protections, and risk disclosure requirements.

Globally, the regulatory landscape is evolving. The European Union has introduced the MiCA framework with harmonized rules. The UK has developed a specific regulatory framework. These parallel efforts create conditions for the crypto bull run to gain international legitimacy, beyond mere speculation.

Why is this element crucial? Institutional investors do not enter a market where legal risks remain undefined. Regulatory clarity transforms the digital market from a gray area of speculation into a regulated professional sector. The economic value of this transformation is immense.

The Third Pillar: Stability of the Global Stock Market

The third requirement involves external factors: the stability of the traditional economy, especially stock markets. The correlation between risky assets—such as tech stocks and cryptocurrencies—has strengthened significantly in recent years.

When the stock market experiences shocks, investors tend to reduce their exposure to cryptocurrencies. Conversely, macroeconomic stability eases selling pressure on digital assets, allowing the crypto bull run to develop without constant external interference.

Data from the Federal Reserve, inflation rates, monetary policies, and global geopolitical risks all influence this balance. Hougan suggests monitoring these indicators not as price forecasts but as measures of the likelihood that the digital market can sustain momentum independently.

How the Crypto Market Achieved Structural Maturity

To understand why these three conditions are now relevant, it’s helpful to compare the present with previous cycles. In 2017, the boom was driven almost entirely by retail speculation and dubious ICO projects. In 2021, expansion was linked to pandemic monetary stimuli and near-zero interest rates.

The current environment is radically different. Institutional-level custody now protects billions in assets. Regulated futures and options markets enable sophisticated hedging strategies. Spot Bitcoin ETFs, approved in early 2024, have created entirely new access channels for traditional and corporate investors.

These infrastructural innovations have transformed the sector from a purely bearish space into a complex, pluralistic ecosystem. The emerging crypto bull run is no longer driven solely by retail euphoria but by the structural fundamentals outlined by Hougan.

Monitoring the Crypto Bull Run: Practical Indicators for Investors

For investors, Bitwise’s analysis offers a concrete checklist. Instead of obsessing over price charts, focus on three parallel dimensions:

• Derivatives market liquidation pressure—monitor on-chain indicators showing volume and distribution of open positions. Excessive increases suggest fragility; stabilization supports the bull run.

• Legislative progress in the U.S. and Europe—track regulatory announcements and bills in progress. These developments form what analysts call the “foundation for sustainable crypto growth.”

• Global macroeconomic indicators—especially interest rate trajectories, inflation expectations, and geopolitical sentiment. These elements determine overall risk appetite.

Implications for Regulators: The Geopolitical Opportunity

For policymakers, Hougan’s message carries a subtle but important geopolitical implication. The U.S. faces competition from other jurisdictions—such as the UK, Singapore, Abu Dhabi—that aim to become global hubs for crypto innovation.

Delaying comprehensive legislation risks ceding innovative capacity and capital flows to faster-regulating regions. A clear legal framework, on the other hand, attracts developers and institutional investors alike, creating durable, competitive ecosystems.

Historical Perspective: The Crypto Bull Run as a Structural Phenomenon

The current cycle represents a qualitative evolution compared to previous ones. It is not just a new price rally—it’s the emergence of a truly mature market, equipped with infrastructure, regulatory certainty, and sophisticated participants.

Today’s crypto bull run no longer depends on a single narrative or event. It hinges on the alignment of three conditions reflecting the sector’s development level. When all three converge, the expansion gains durability unlike any previous cycle.

Frequently Asked Questions About the Crypto Bull Run

Q1: What are the three pillars of the crypto bull run according to Hougan?
The first is the absence of massive liquidation shocks in derivatives markets. The second is the approval of clear legislation on the crypto market structure. The third is the stability of the global stock market and macroeconomic environment.

Q2: Can the crypto market develop without one of these three conditions?
Technically yes, but in a fragmented and volatile way. Hougan suggests that lacking any of these three dimensions significantly limits the market’s ability to sustain a durable and convincing bull run.

Q3: How can I practically monitor these three pillars?
For the first, consult on-chain indicators related to derivatives open positions. For the second, follow legislative progress in the U.S. and Europe. For the third, track global economic data, Federal Reserve statements, and geopolitical sentiment.

Q4: Is a crypto bull run guaranteed if all three conditions are met?
No. These three conditions are necessary but not sufficient. Other variables—adoption, technological innovation, retail sentiment—remain relevant. However, missing even one dimension greatly increases the risk of disruption.

Q5: How does this crypto bull run differ from previous ones?
The current cycle involves sophisticated institutional participants, regulated infrastructure, and transparent on-chain data. Past cycles were mainly driven by retail speculation and narratives, without the same level of structural maturity.