Next Bitcoin Bull Market? Bitwise CIO Points to 4 Key Catalysts

Bitcoin trades near $65.5K as Bitwise CIO cites agentic finance, DeFi, quantum upgrades, and tokenization as bull market catalysts.

Bitcoin traded near $65,500 as weakness continued across the broader crypto market.

Despite the decline, Bitwise Chief Investment Officer Matt Hougan said early conditions for a new Bitcoin bull market may be forming. He identified four developments that could support a future rally even as sentiment remains cautious.

Agentic Finance and Institutional DeFi Expansion

Hougan pointed to the rise of agentic finance as a potential catalyst. He referenced Coinbase’s launch of “Agentic Wallets,” designed for autonomous on-chain agents.

Coinbase said the wallets allow agents to hold identity, manage funds, and execute transactions without human input.

The company stated that the system supports programmable spending rules and non-custodial identity features.

It also said transactions are gasless on the Base network, and any token can be used for fees. These developments reflect growing automation within blockchain infrastructure.

Hougan also cited increased institutional participation in decentralized finance. BlackRock recently announced plans to expand its BUIDL token onto Uniswap.

Reports said BlackRock will purchase an undisclosed amount of UNI tokens. The move connects traditional asset management with on-chain liquidity platforms.

Quantum Security Progress and Tokenization Push

Hougan identified quantum risk mitigation as another supportive factor. Bitcoin Improvement Proposal 360 was recently merged into Bitcoin’s official repository.

The proposal aims to strengthen the network against potential future quantum computing threats.

Developers continue working on long-term security measures as computing capabilities evolve.

While quantum risks remain theoretical, research and preparation efforts are ongoing within the Bitcoin ecosystem. The update reflects continued technical development despite price weakness.

Tokenization efforts were also cited as a key trend. Institutions such as CME, Broadridge, and UBS recently announced blockchain-based asset initiatives.

These projects focus on issuing and settling traditional financial instruments on distributed ledgers. Institutional tokenization activity has expanded steadily during the past year.

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Extreme Short Positioning and Broader Market Context

On-chain analytics firm Santiment reported deeply negative funding rates across major exchanges.

Funding rates help align perpetual futures contracts with spot market prices. When rates turn negative, short sellers pay long traders, which signals heavy bearish positioning.

Santiment said current short exposure is the highest since August 2024.

During that period, Bitcoin later reversed and gained about 83% over four months.

The firm noted that extreme negative funding can create short squeeze conditions if prices rebound.

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