Bitwise’s Chief Investment Officer Matt Hougan believes that Bitcoin’s future could be far more bullish than previously anticipated, as key catalysts like government adoption, regulatory clarity, and massive institutional investment come to the fore.
“What’s happening in the bitcoin market right now is making me rethink what’s possible,” said Hougan, in his recent takeaway from the 2024 Bitcoin conference.
The collapse of FTX in November 2022 largely influenced the public perception of crypto, leading to increased skepticism and mistrust within the industry. It also drew the watchful gaze of lawmakers and regulators.
Now, Bitcoin is being discussed as a strategic asset for nations, Hougan noted. High-profile politicians, including both Democrats and Republicans, are openly endorsing Bitcoin.
US presidential candidate Donald Trump said in Nashville last week that if elected, he would make Bitcoin a US strategic reserve asset and keep 100% of Bitcoin the government currently holds or acquires in the future.
Similarly, Senator Cynthia Lummis (R-WY) has advocated for the US Treasury to acquire 1 million Bitcoin, and Robert F. Kennedy Jr. suggested acquiring 4 million to match the US’s share of global gold reserves, Hougan highlighted.
Hougan also pointed to the efforts of Kamala Harris’s team to reset the relationship with crypto firms. A recent report from Financial Times revealed that her campaign reached out to major crypto companies, including Coinbase (NASDAQ:COIN), Ripple Labs, and Circle to improve ties with the industry, which have been strained due to perceived regulatory overreach by the Biden administration.
According to Hougan, while politicians’ motives may be opportunistic, their embrace of Bitcoin and crypto is likely a pragmatic response to the technology’s growing mainstream acceptance among their constituents. Politicians are simply following the public’s lead on the issue.
“Most politicians don’t truly love Bitcoin; they are just genuflecting to its rising popularity,” Hougan stated. “But I’m not sure that matters. When you say “opportunism,” I say, “That’s how politics works.” Politicians are embracing crypto because Americans are embracing crypto.”
For a long time, the Bitcoin market has been dominated by concerns over downside risk, including price crashes and the potential for a drop to zero. However, these developments have heightened the probability that Bitcoin’s price will increase dramatically, according to Bitwise’s CIO.
He suggested that other factors, including the swift passage of comprehensive crypto legislation in the US and the massive influx of capital from Wall Street, could also contribute to a major surge in Bitcoin’s price and adoption.
“I think we have to accept that there is now an equal risk to the upside,” Hougan stated.
“If the 2024 Bitcoin Conference conveyed anything, it was this: It’s time to rethink what’s possible for Bitcoin,” Hougan concluded.