Bitcoin could lose its reputation as a volatile asset.
According to Matt Hougan of Bitwise Asset Management, the cryptocurrency’s wild price swings have declined significantly over the past decade.
“What’s driving the Bitcoin market right now is a simple imbalance between demand and supply,” the company’s chief investment officer told CNBC’s “ETF Edge” on Monday. “We have this huge new source of demand for these ETFs and our supply is inelastic.”
On January 11, the first Bitcoin exchange-traded funds began trading. Since then, the asset has risen by more than 50%. Bitcoin reached an all-time high of just under $74,000 this week.
However, Hougan acknowledges that this may not be for everyone.
“There is a lot of movement. Some people find it hard to understand,” Hougan said.
While Bitwise relies on the growth of Bitcoin, ProShares has an ETF that wants to profit from losses Short Bitcoin Strategy ETF. It’s down 42% so far this year and has plunged nearly 70% over the past year.
“To quote Mark Twain, ‘The reports of our deaths were quite exaggerated,'” Simeon Hyman of ProShares told CNBC. “We are happy to be here and we believe we represent an important alternative.”
Hyman, the firm’s global investment strategist, notes that Bitcoin’s historical strength has lasted much longer than it has since the launch of spot Bitcoin ETFs.
“This is the anniversary month of the collapse of crypto-related financial institutions. Last year, Bitcoin also saw a surge,” Hyman said. “I think there are longer-term people who are committed to asset allocation and diversification.”
Hyman’s ProShares also runs a long Bitcoin ETF: ProShares Bitcoin Strategy ETF. It is up 55% since January 1 and has gained 111% over the past year.
As of Friday evening, Bitcoin is up 180% over the past 12 months.
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2024-03-16 15:00:01
www.cnbc.com
