Bitcoin rallies above $86,000 as investors debate end of 'crypto winter'

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Bitcoin rose above $86,000 on Monday as the cryptocurrency continued its sharp rally over the past few days.

Bitcoin was trading at $85,863.40, up around 5.8%, according to CoinMetrics. Earlier in the day, the cryptocurrency rose as high as $86,349.90 , its highest level since late Jan. 29.

Investors are assessing whether the "crypto winter" — a depressed period of digital asset prices — which began after bitcoin hit an all-time high of over $126,000 in October 2025, is over.

"I do think it's over, it's crypto spring, the crocuses are blooming," Matt Hougan, CIO at Bitwise, told CNBC's "Squawk Box Europe" on Monday. "I think this will actually be the strongest and longest-running bull market in crypto's history."

While bitcoin is still down this year, it has risen more than 8% in the past week and 34% over the past 3 months. It is still well off its record high.

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Hougan said even though the market was down for a while, the "fundamentals went up" in cryptocurrency, pointing to more transactions across blockchains and involvement from major firms like BlackRock.

"So I think we had this unusual situation where you had a cyclical decline in prices even as you had a secular improvement in fundamentals. And now I suspect that prices are going to catch up toward the end of the year," Hougan said.

"I don't think if I came back next year, we'd still be below those all-time highs."

Analysts at BTIG said in a note on Sunday that, as long as the $75,000 level of bitcoin holds, "bulls can target a push through 82k on the way to" $90,000.

Crypto-related stocks, including Strategy and Coinbase , were higher in U.S. trading on Monday.

AI rotation?

The rally comes even as the U.S. Senate last week blocked the Clarity Act from advancing. It would have set up a framework for crypto in the U.S. and divided industry oversight between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

More regulation in the U.S., such as the Genius Act that was passed last year, has supported crypto prices. But the Clarity Act failing to pass could still boost prices, as the SEC and CFTC will set the rules for now, Hougan said.

"It's the most pro-crypto SEC in the history of the U.S.; it's the most pro-crypto CFTC in the history of the U.S. So ironically, in the absence of Clarity passing, we may actually have stronger pro-crypto regulation," Hougan said.

The Bitwise CIO also said that investors are rotating out of AI stocks back into crypto.

He added that the AI boom had "sucked all the oxygen out of the room. Any investor who was a momentum-driven investor was focused on that. Now that that has sort of levelled off, you're seeing that money rotate back into crypto.

- CNBC's Tanaya Macheel and Garrett Downs contributed to this report.