Driven by institutional adoption, blockchain innovation, and ETF flows—despite temporary volatility brought on by Federal Reserve actions—the bitcoin market is on course for a multi-year bull run, Matt Hougan, Chief Investment Officer at Bitwise Asset Management, says.
Hougan expressed optimism in the long run trajectory of the crypto market in a Dec. 19 discussion on social media site X, even as Bitcoin’s price dropped below $100K following the Federal Reserve’s most recent pronouncement. He underlined that this decline does not indicate a flip in the upward trend.
“The Fed announcement was the major catalyst today,” Hougan said. “The Fed lowered expected cuts from four to two, but cutting rates by 25 basis points as expected. Higher rates cause a significant downturn across markets by severely impacting risk assets. The Russell 2000 Small Cap Index sank 4.4%; the S&P 500 dropped 3%.
Leveraged trading compounded the fall in Bitcoin value; $600 million in long positions closed following the announcement. Hougan, on the other hand, said this was only a temporary fluctuation—that of a “hiccup” in the more general bullish trend.
Hougan pointed out numerous elements driving the ongoing increase of cryptocurrencies:
a U.S. policy pro-crypto change.
Growing institutional acceptance along with ETF inflows.
Rising government and business Bitcoin purchases.
Groundbreaking developments in technologies for programmed blockchains.
To show the endurance of the market, he also alluded to a technical indicator: “Bitcoin’s 10-day exponential moving average ($102K) remains above its 20-day exponential moving average ($99K). Historically, this has been a strong indication of ongoing momentum in direction of increase.
Hougan is positive despite Fed-driven market volatility, pointing out the convergence of macroeconomic and technological forces ready to propel the bitcoin market into a protracted phase of expansion.
