Hedge funds cut NFLX, keep big bets on MSFT, AMZN, add NVDA
Bitwise’s Chief Investment Officer Matt Hougan shared insights on the potential impact of US President Donald Trump’s recent executive order on the cryptocurrency market, Cointelegraph reported.
The order, issued on January 23, together with regulatory changes at the Securities and Exchange Commission (SEC), could mark the "full mainstreaming of crypto," according to Hougan. He suggested that this shift would allow banks and Wall Street to enter the crypto space more aggressively.
Hougan’s commentary, detailed in a January 29 note, highlighted the historical four-year boom and bust cycle of the crypto market, which has been observed over the past decade. Bitcoin, for instance, has experienced significant pullbacks in 2014, 2018, and 2022, with recovery peaks in the intervening years. Despite this pattern, Hougan expressed optimism that the industry might not fully succumb to this cycle in the future, anticipating any downturns to be "shorter and shallower than in years past."
The Bitwise investment chief pointed to the increased maturity of the crypto space, with a broader range of buyers and more value-oriented investors than before. He expects volatility but remains cautiously optimistic about the market’s prospects, even in the face of the expected 2026 cycle pullback.
Hougan also mentioned the role of high-profile bankruptcies, such as those of FTX, Three Arrows Capital, Genesis, BlockFi, and Celsius, in contributing to the 2022 market downturn. He compared these to previous cycle catalysts, including the SEC’s crackdown on initial coin offerings and the collapse of Mt. Gox.
The implementation of Trump’s executive order, which includes exploring the creation of a digital asset stockpile and establishing a regulatory framework, is not expected to show immediate effects. Hougan noted that David Sacks, the White House’s crypto czar, would require time to develop these regulations. Similarly, Wall Street’s major players will need time to fully harness the potential of cryptocurrencies.
A significant regulatory development that may facilitate Wall Street’s entry into the crypto market is the SEC’s decision to cancel its Staff Accounting Bulletin 121 rule. This rule previously required financial firms holding cryptocurrencies to list them as liabilities on their balance sheets, thus complicating custodial services for these assets.
In conclusion, Hougan reiterated Bitwise’s bold prediction for Bitcoin’s price, forecasting it could reach $200,000 by the end of 2025. He believes this target is achievable with or without the establishment of a strategic Bitcoin reserve.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.