Hypoxia and psychedelics, despite their distinct origins, both induce altered states of consciousness and promote neuroplasticity, suggesting a shared underlying mechanism relevant to neuropsychiatric treatment and neurological recovery. Terminal lucidity, the transient resurgence of cognitive function in late-stage dementia, highlights the brain's latent capacity for rapid reorganization, a phenomenon that may be driven by transient hypoxia. Similarly, acute intermittent hypoxia and pharmacological agents like HypoxyStat, which modulate oxygen availability, have emerged as potential strategies for enhancing neural adaptability. This perspective explores the hypothesis that controlled reductions in oxygen availabilitywhether through psychedelics, near-death experiences, meditation, holotropic breathwork, or hypoxia therapiestrigger calcium signaling pathways that promote synaptogenesis and the formation of new neural circuits. Rather than restoring damaged connections, this process may enable functional rerouting, thereby supporting cognitive resilience and behavioral compensation in conditions such as stroke, Alzheimer's disease, and psychiatric disorders. By integrating insights from psychedelic research, hypoxia-based therapies, and neuroplasticity studies, we propose a unifying framework that leverages altered oxygen homeostasis as a novel therapeutic strategy for neuropsychiatric and neurodegenerative diseases.