Bitwise CIO warns of retail capitulation while institutional demand for Bitcoin persists
Bitcoin is trading below $100,000, hitting its lowest point since June. Retail investors are panicking, and leverage trades have collapsed, signaling a possible crypto winter. However, Matt Hougan, CIO of Bitwise, views this selloff as an opportunity for Bitcoin to hit a new all-time high before year-end. Institutional investors and financial advisors remain optimistic, continuing to allocate to Bitcoin despite the downturn. Products like iShares Bitcoin Trust, Fidelity's Bitcoin Fund, and the Grayscale Bitcoin Trust are still attracting capital, indicating strong institutional interest. Hougan anticipates a retail sentiment reset, which could lead to a fast rebound in Bitcoin prices, potentially reaching $125,000 or even $150,000. He highlights a widening gap between Bitcoin and stocks, suggesting Bitcoin may decouple from traditional markets. Institutional stability is expected to drive Bitcoin's recovery.
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Bitcoin Hits Lowest Levels Since June Amid Retail Panic
Bitcoin is now trading below $100,000, reaching its lowest level since June. The panic button has been hit by many retail investors, with leverage trades collapsing and market sentiment plummeting. This scenario has been likened to a potential crypto winter.
Matt Hougan Anticipates Bitcoin Recovery
Despite the downturn, Matt Hougan, Chief Investment Officer at Bitwise, remains optimistic. He views the drastic selloff as a potential precursor to Bitcoin achieving a new all-time high before year-end. Speaking on CNBC, Matt noted, "It’s almost a tale of two markets. Crypto retail is in max desperation. We’ve seen leverage blowouts … the market for sort of crypto-native retail is just more depressed than I’ve ever seen it."
Institutional Investors Stay the Course
Unlike retail investors, Matt highlighted that institutional investors remain committed to Bitcoin. He shared, "When I go out and speak to institutions or financial advisors, they’re still excited to allocate to an asset class that, over the course of a year, is still delivering very strong returns." Despite market turbulence, financial advisors and Wall Street firms are still eager to gain exposure to Bitcoin.
Strength in Bitcoin Investment Products
Matt pointed to the sustained performance of major Bitcoin investment vehicles, including the iShares Bitcoin Trust (IBIT), Fidelity Wise Origin Bitcoin Fund (FBTC), and the Grayscale Bitcoin Trust (GBTC), which continue to attract significant capital. Bitwise’s own Solana staking ETF (BSOL) saw over $400 million inflows in its debut week, despite facing a subsequent 20% drop. Matt suggested that advisors could use this downturn to strategically increase allocations.
Retail Sentiment Flush-Out Needed
Matt emphasized the need for a final retail sentiment cleanup to stabilize the market. He stated, "We have to get through this retail flush-out. We have to hit bottom from a sentiment perspective. I think we’re very close to that." He believes that once selling pressure subsides and buying resumes, Bitcoin’s price could see a rapid acceleration.
Bitcoin’s Potential Rebound and Price Predictions
Despite Bitcoin hovering near a six-month low, Matt remains hopeful for a significant recovery. He mentioned the possibility of Bitcoin surging past $125,000 or even $130,000 before year-end. He echoed sentiments from Michael Saylor, CEO of MicroStrategy, who predicted a $150,000 price target for Bitcoin. Matt remarked, "I think we’re closer to the end of that [retail panic] than the beginning, but … there always could be a little bit more downside."
Bitcoin Decouples from Stock Market Movement
Matt highlighted Bitcoin’s widening decoupling from traditional stock markets. Over the past week, Bitcoin dropped 12.2%, compared to smaller declines in the S&P 500 (1.2%) and Nasdaq (0.9%). Matt suggested that a stabilization or rebound in stock markets could give Bitcoin more room to grow. As of Wednesday morning, Dow futures rose slightly by 36 points, while the S&P 500 and Nasdaq 100 futures experienced slight declines.