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Bitwise Chief Investment Officer Matt Hougan sees Monday’s crypto sell-off, which tanked crypto markets to a $2 trillion market capitalization, as a buying opportunity.
What Happened: Hougan on Monday highlighted that most crypto investors are experiencing a brutal swing of emotions like fear and despair. In his post on social media platform X, he highlighted that market participants who believed crypto was supposed to be a hedge against global uncertainty were taken aback by the recent plunge.
He also drew parallels to the last time when global capital markets melted in March 2020 at the start of the pandemic. Amongst all assets, Bitcoin fared the worst (-37%) wiping its yearly gains in a day. However, that turned out to be a buying opportunity for BTC.
Hougan highlighted that the pandemic "supercharged the reasons for Bitcoin's long-term rise," demonstrating that centralized institutions have their limitations.
Hougan also noted that economic factors were to blame for Bitcoin‘s (CRYPTO: BTC), and Ethereum’s (CRYPTO: ETH) seven-day losses of 17% and 26%, respectively.
Also Read: 6 Factors Causing The Crypto Panic: ‘Seems Like More Reason To Buy Than Sell,’ Says Expert
The crypto Fear and Greed Index has tumbled to the fear zone (34) after Japan’s Nikkei Index recorded the worst day since 1987.
What’s Next: Hougan added that the odds of a 50-basis points rate cut in September by the Federal Reserve have gone up from 11% to 98%. He stated that during periods of panic, crypto has always traded down initially but ended much higher a year later. He concluded, "Maybe this time really is different, but I wouldn't bet on it. In fact, I'm betting the other way."
The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.
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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image: Shutterstock
