Bitwise CIO: Cryptocurrency will explode in the second half of this year
A top executive at Bitwise Asset Management said the current price drop is temporary.
“Every time the market crashes, it’s annoying. But I think prices are really setting up for an extremely strong second half of the year.”
Hougan said the decline in crypto prices was due to multiple issues in a row.
“The current pullback is being caused by three things happening at the same time. One of them is the transformation of the broad market into a risk-free market, affecting all types of risky assets, including cryptocurrencies. I think we’re almost done adjusting to this new reality.
The second part is Biden’s edict on crypto, due to be released this week. I think once we get over that it will be a real relief. And then there’s the tax-related sale.
There are short-term hurdles, but looking at the underlying trends, I’m extremely optimistic about where we’ll be at the end of the year.”
According to previous reports, the Biden administration is preparing to issue an executive order directing US government agencies to review digital assets and develop a strategy to regulate them.
According to Hougan, Bitcoin could hit ATH thanks to positive developments towards the leading digital asset and the broader crypto space.
“I wouldn’t be surprised if bitcoin challenges and even surpasses the previous ATH as long as things move in a positive direction.
How about, for example, if a Bitcoin ETF were approved. If we see reasonable regulatory outcomes from Washington DC and if we continue to receive crypto adoption trends from the institution.
I definitely think ATH is the goal at the end of the year when we see that.”
Bitcoin, ETH and other major cryptocurrencies are up more than 11% in a 24-hour period, almost reviving Wednesday night’s levels. Bitcoin is currently trading at $39,454 at press time, versus Thursday’s lows of $34,725.
The rally, which began Thursday afternoon (UTC), has caused more than $130 million in losses due to the liquidation of futures contracts that track crypto prices over the past 12 hours. According to data from analytics tool Coinglass, around 70% of traders have either shorted the market or made a non-bullish bet.
Bitcoin bounced off support yesterday | Source: TradingView
Some analysts say demand for Bitcoin and other cryptocurrencies could increase in the coming days as they are viewed as liquidity tools.
Alex Kuptsikevich, Senior Financial Analyst at FxPro, pointed out:
“Currently, the markets have the highest demand for the liquid instrument, making bitcoin slightly less risky than altcoins. There is a possibility that further deterioration in financial conditions could result in the flagship coin becoming a capital-saving vehicle for investors from Ukraine, Russia and several neighboring countries.”
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