The chief investment officer of Bitwise Investments crypto fund, Matt Hougan, is expressing bullish market sentiment.
Hougan says in an investor letter that the crypto market is “well positioned to stage a recovery” and chart a path to a record-breaking bullish cycle.
“In the end, however, we believe crypto will recover. Historically, crypto has bounced back from every major pullback. We don’t think this one will be different.
In fact, we think the next bull market in crypto will be the biggest yet – with new all-time highs and a wave of new applications that impact mainstream adoption.”
According to Hougan, some of the reasons for the bullishness include the growth and innovation witnessed in the crypto industry.
“Technological blockchain improvements like Ethereum’s Merge, scaling advances like the rise of Layer-2 solutions and a simmering stew of emerging new applications have us bullish.”
The Bitwise CIO, however, says that the crypto market will have a U-shaped recovery or long-winded recovery rather than a quick rebound or a V-shaped one.
“We suspect the market will grind sideways for a period before entering its next bullish phase. There is even a meaningful risk of another leg down, catalyzed by another crypto company failure, token blowup, or regulatory action.”
According to Hougan, the recovery will not be a walk in the park.
“Recovery won’t be easy, though. The fraud-ridden implosion of FTX and the broader crypto credit crisis casts a long, dark shadow over the space. Regulators are circling, banking relationships are frayed, and investors are skeptical.
In addition, new risks – like the planned release of 127,000 bitcoin from the Mt. Gox settlement later this year, and distress in the bitcoin mining space – loom on the horizon.”
A months-old report puts Bitwise’s assets under management at $1.3 billion.Don't Miss a Beat – Subscribe to get crypto email alerts delivered directly to your inbox
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