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Bitwise CIO sees Bitcoins potential echoing post-COVID surge

Bitwise CIO sees Bitcoins potential echoing post-COVID surge
© Copyright Image: CryptoSlate

Bitwise Chief Investment Officer Matthew Hougan said the current market conditions are a prime buying opportunity for investors interested in Bitcoin, according to an Aug. 5 investor note.

Hougan pointed out that Bitcoin had historically ended the year higher following global economic stress and drew parallels to the 2020 COVID-19 crisis when BTC, like other assets, saw a sharp decline but eventually surged over 1,000% within a year.

Hougan noted that increased central bank interventions and the growing adoption of digital assets fueled this dramatic rise.

The investment chief suggested a similar scenario could unfold now because Bitcoin [is] becoming more important, not less.

He wrote:

Nothing fundamental [has] changed about bitcoin. If anything, whats happening now is straight out of the Covid playbook.

Why Bitcoin will rise

Considering the above, Hougan anticipates a similar rebound this time. He expects the Federal Reserve to respond to economic unrest with increased liquidity, as it did during past crises.

He stated:

Is the money printer coming? If history is any guide, yes. It happened during Covid. It happened after the eurozone crisis in 2010. And it happened in 2008. If the events of this weekend lead to real economic unrest, it will happen again.

The market anticipates a 98% chance of a rate cut by the Federal Reserve at its September meeting, as investors hope that fears of a recession will prompt an emergency rate cut. Historically, such interventions benefit riskier assets like Bitcoin, which investors pile into to hedge their investments.

So, Hougan advised investors to focus on Bitcoins long-term potential rather than short-term price fluctuations.

He emphasized:

My real advice is to ignore the short term and key your eyes downfield. Bitcoin is a volatile asset, with big ups and big downs. Always has been, and will continue to be for a while. Times like these reinforce that market timing is a fools errand.

The post Bitwise CIO sees Bitcoins potential echoing post-COVID surge appeared first on CryptoSlate.

Read more: https://cryptoslate.com/bitwise-cio-sees-bitcoins-potential-echoing-post-covid-surge/

Text source: CryptoSlate

Disclaimer: Financial information and news are not financial advice, read the disclaimer.
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