Matt Hougan, the Chief Investment Officer of Bitwise 10 Crypto Index Fund (BITW), recently sat down for an interview to explain the recent surge in the price of Bitcoin. During the interview, he also discussed another digital currency that he believes was going to be the ‘asset of the year’ in 2021.
Hougan Explains Why Bitcoin Broke Past $20,000
At one time, Bitcoin was described as a Ponzi scheme. Despite negative views by renowned investors such as Peter Schiff and Warren Buffet, the price of Bitcoin finally surged above $20,000 on December 16, 2020. In the past, Hougan has explained why Bitcoin was not simply a “greater fool theory” investment. According to Hougan, those who have been in the crypto sector for a while expected this to happen. Hougan had a long and successful career in the ETF world before he became the CIO of Bitwise Asset Management, a crypto-focused investment firm.
According to him, the core reason for the surge is that it is a ‘once-in-a-generation style technological breakthrough.’ Hougan went on to explain that the technology was permeating multiple markets worth trillions of dollars. He added that there was a huge market opportunity. The CIO noted that it was a great validation to see BTC break out to a new ATH.
New Investors Enter The Crypto Sector
According to Hougan, new investors who had never invested in Bitcoin before were behind the 212% BTC rally in 2020. He pointed out high-profile hedge fund managers such as Stanley Druckenmiller and Paul Tudor Jones, who were deploying significant capital into Bitcoin. He also noted that major corporations such as Square and MicroStrategy now had large holdings in Bitcoin. Even MassMutual, a major insurance firm, had invested $100 million in Bitcoin recently.
Hougan said that crypto was built on a base of retail investors. He noted that its value had risen from zero to the current price of above $20,000 mainly on the back of retail investors and their belief in it. The CIO noted that there had been a surge in mainstream adoption by institutional and professional investors. These investors had more wealth than retail investors did. He noted that this continued trend could push the prices even higher in the foreseeable future.
Bitwise 10 Crypto Index Fund Just Started OTC Trading
Just a week before Bitcoin went over $20,000, the Bitwise 10 Crypto Index Fund began OTC trading under the BITW ticker. The fund tracks an index of the 10 biggest crypto coins by market cap. According to the Bitwise website, the fund has already grown ~97.7% since inception. The trading activity made it the most highly traded crypto fund launch in history. In a push to help investors diversify, many believe that Bitwise will be a top competitor to crypto asset managers like Grayscale.
The Next Major Cryptocurrency
According to Hougan, while he is Bullish on Bitcoin as digital gold and potentially a non-sovereign currency, he is quite bullish on Ethereum. According to him, it could be the ‘asset of the year’ in 2021.
He noted that Ethereum was more flexible than Bitcoin since Ethereum could potentially be programmed to do more than Bitcoin. Hougan noted that the Decentralized Finance market, which Ethereum was at the heart of, was growing rapidly. Another reason why he believes ETH will make waves in 2021 is the recent decision by CME Group to launch Ethereum futures in February 2021.
The growing interest by mainstream investors has no doubt had a major impact on the price of Bitcoin. The interest is likely to continue in 2021. The price of BTC could continue breaking through new barriers in the coming year as adoption, use cases, and interest grows.
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