Bitwise’s Chief Investment Officer (CIO), Matt Hougan, stated that the most significant reason for the recent decline in Bitcoin is the “four-year cycle,” a phenomenon previously observed three times in the cryptocurrency markets. Hougan emphasized that investors should not attribute this decline to a single cause.
According to Hougan, in addition to the cyclical effect, a number of factors that reduced risk appetite in the markets accelerated the decline. These included the shift of capital towards assets that periodically stand out, such as gold and AI stocks, the uncertainties surrounding Kevin Warsh, whose name was mentioned in connection with appointments to the US Federal Reserve (Fed), and the amplification of quantitative risk factors in bear markets.
However, Hougan argued that even if market sentiment is weak, Bitcoin’s fundamental dynamics remain unchanged. He stated that Bitcoin’s limited supply and “scarcity” characteristic have not disappeared with the financialization process, and that demand in derivative markets must eventually be matched in the spot market.
In his assessment of crypto ETFs, Hougan stated that a kind of “self-fulfilling prophecy” effect was occurring in the market, but that Bitcoin’s weakness would not fundamentally alter the ETF growth trend. Hougan also revealed that crypto ETFs hold a significant share of the $15 billion in assets managed by Bitwise.
Hougan’s remarks suggest that while Bitcoin may be under short-term pressure, its long-term narrative remains strong for investors.
*This is not investment advice.
