Bitcoin rally to extend to summer and beyond: Strategist
Bitcoin is edging closer to all-time highs as the crypto market reaps the benefits of spot Bitcoin ETFs, coupled with more applications for Ethereum ETFs, providing positive sentiment for the entire crypto sphere. Matt Hogan, the Chief Investment Officer of Bitwise Asset Management, joins to discuss the future of digital assets.
Supply and demand drives Bitcoin boom
Despite the belief that the crypto market would pave way for ‘sell the news’ events after Bitcoin ETFs went public, the demand for ETFs exceeded all expectations. Hogan opines that the demand for ETFs was the catalyst that sparked the recent Bitcoin boom. The ETFs bought over 30,000 Bitcoins net while miners only produced 6,000 Bitcoins. As Bitcoin’s demand surpasses the supply, prices are poised to increase.
The only factor that could inhibit the rally is if long-term investors sell their Bitcoin holdings, Hogan points out. When this occurs — as ETFs soak up more than 100% of the net new supply — prices could begin to pull back. Despite this factor, though, Hogan maintains that Bitcoin prices will continue to soar over the summer and beyond.
Crypto on the ballot
Hogan indicates that worldwide elections make 2022 a potential breakout year for cryptocurrencies. Crypto may come up as a considerable financial incentive for lawmakers, as around 100 million Americans are exposed to cryptocurrencies in some way. Advocates can leverage this critical mass of crypto holders to increase momentum for crypto in Washington.
Hogan further asserts that incorporating crypto into voting could tilt election results in some locales. As congress begins to look to 2022, the regulatory headwinds that crypto faced in 2018 seem to be flipping into tailwinds as we enter the end of 2022, he said.
Crypto political potential
Regarding Biden versus Trump, Hogan says that a democrat sweep could be negative for crypto with harsher regulations from the SEC. However, he believes that generally, trends in Washington are moving in crypto’s direction. Democrats and Republicans increasingly recognise crypto’s potential, and the industry seems confident that the government will ultimately work on implementing legislation.
Hot Take
As Bitwise Asset Management’s CIO Matt Hogan notes, the crypto market continues to grow as Bitcoin rallies ever closer to all-time highs. He believes that the ETF demand will continue to fuel growth in the crypto market, even as the supply of Bitcoin decreases. He also notes that, beyond the ETFs, political action could play an enormous role in the crypto’s rise in 2022.
Ultimately, Bitcoin reaching near all-time highs is undoubtedly good news for crypto investors. The crypto market appears not only to have rebounded from its pandemic slump but to have a viable future path. Prominent voices from within the industry are optimistic about the future of crypto.
Althea Burnett stands as a luminary seamlessly blending the roles of crypto analyst, relentless researcher, and editorial virtuoso into an intricate tapestry of insight. Amidst the dynamic realm of digital currencies, Althea’s insights resonate like finely tuned notes, reaching minds across diverse horizons. Her ability to decipher intricate threads of crypto intricacies harmonizes seamlessly with her editorial finesse, transforming complexity into an eloquent symphony of understanding.