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- 🪦 RIP 4-year cycle
🪦 RIP 4-year cycle
Matt Hougan thinks 70% drawdowns are a thing of the past
“This time is different.”
First, bitcoin set an all-time high before a halving. Truly a novelty. Then, ETFs roped in a whole new world of investors into bitcoin, followed by treasury companies with steady buying pressure. The Saylor playbook.
It was once a meme, but there’s no question that your daddy’s bitcoin market is long gone.
Matt Hougan should know. The Bitwise chief investment officer breathes bitcoin markets and is now convinced that the four-year cycle could never come back.
Some of it has to do with the diminishing impact of halvings, Hougan told Rizzo on today’s Supply Shock episode.
Mix that with the long-term investing habits of the institutional crowd, and the brutal days of 70-80% corrections during bear markets could be behind us.
“They [institutions] are slow-moving. They don't move with the speed of retail investors who move in and out of assets on a four-year cycle. As soon as the market turned, they were out,” Hougan said.
“That's just not the way institutions act. They're allocating for the next 10, 20 years…that's sort of the way it happens in this space. So once you've made it into the club, once you're part of the portfolio settings, the market could be up or down — they're still going to be buying.”
Hougan predicts that inflows for bitcoin ETFs this year will top $50 billion, up from $35 billion in their first year. Inflows could reach $75 billion in year three, and even more in year four.
“That's what ETFs tend to do. Flows tend to increase over time, and I think that's what we're gonna see from institutions. I just think they're moving into crypto, and I think that's gonna take multiple years, and that's gonna overwhelm [that] sort of four-year cyclicality.”
Catch the full episode on YouTube, Spotify, Apple Podcasts and X.
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