Bitcoin’s Reputation is Changing
Bitcoin’s reputation as a highly volatile asset may be diminishing, as noted by Matt Hougan from Bitwise Asset Management. He points out that the cryptocurrency’s price fluctuations have significantly decreased over the last decade. Speaking to CNBC’s “ETF Edge,” Hougan attributed the current market dynamics to a straightforward demand-supply imbalance, exacerbated by the recent introduction of Bitcoin ETFs, which have led to a surge in demand against a backdrop of fixed supply.
The inauguration of the first Bitcoin exchange-traded funds on January 11 marked a pivotal moment, contributing to a more than 50% increase in Bitcoin’s value since their launch. Recently, Bitcoin approached an unprecedented peak, nearing $74,000.
However, Hougan also noted that Bitcoin might not appeal to everyone due to its price volatility and complexity.
While Bitwise is optimistic about Bitcoin’s continued growth, ProShares has introduced a Short Bitcoin Strategy ETF aimed at capitalizing on Bitcoin’s potential losses. This ETF has seen a decline of 42% this year and nearly 70% over the past twelve months.
ProShares’ Simeon Hyman, in response to critiques, humorously invoked Mark Twain, “To quote Mark Twain, ‘The reports of our death have been quite exaggerated,‘” Hyman told CNBC. “We’re happy to be here, and we think we’re serving as a key alternative.”
Hyman further commented on the sustained interest in Bitcoin, independent of the recent ETF launches, and highlighted the increasing attention from long-term investors seeking diversification and asset allocation. ProShares also has a long-bitcoin ETF.