Bitcoin’s surge in price over the past few days has led to a wave of new speculation circulating in the cryptocurrency world. This rally has been noted by Bitwise Asset Management’s Chief Investment Officer, Matt Hougan, and he thinks that it could kick off another major upside move.
If Bitcoin and other cryptocurrencies surge, Hougan says nobody wants to be left out while investors rush to jump on board before the next big one. The interested investor level was high, said Hougan, and he added that there is quite some capital on the sidelines. But he said, “People don’t want to be left behind if and when crypto takes off.” A lot of dry powder on the sidelines and as soon as we get any whiff of clarity we go higher fast there.
Bitcoin’s Price Increases by 5% in Major Rally
In his recently published memo titled “Crypto Is Not Waiting For the Election“, Hougan explores what has been taking place in the cryptocurrency market. However, he pointed to Bitcoin’s 5% increase and Ether’s more than 7% rise the biggest gains on a single day in almost two months.
Hougan, meanwhile, said that this rally was sparked in part by Democratic presidential candidate Kamala Harris’ announcement last week of a regulatory framework for the crypto industry. The crypto community was on the edge of its seat for Harris’ plan, as revealed on Monday.
The proposal is in the early stages and, more symbolically than actually, it triggered a ripple effect in the market. Investors have funneled into the $555 million to the Bitcoin exchange-traded funds, the largest since April. Hougan is still iffy on its actual effect on the industry’s long-term direction, despite Harris’s proposal grabbing headlines.
He likened the proposal to a “Rorschach test” in which people on both sides of the regulatory debate could read it in their own way. Even if it is symbolic, the proposal clearly resonates with investor sentiment because the flare of capital into Bitcoin and cryptocurrencies generally shows.
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Over $500 Million Flows into Bitcoin ETFs Following Rally
According to Hougan, even a little positive news can kick off a very large crypto market movement. “We got that little sliver of good news, and that sent Bitcoin up 5%. “ That’s enough to push more than $500 million worth of Bitcoin ETFs. “The increased activity is enough for people to start wondering if crypto is finally going to assault all-time highs,” he wrote.
Hougan said this price action is clear evidence that a lot of capital is waiting to come into the market when the regulatory dust settles. Additionally, Hougan discussed what or who may cause Bitcoin to climb to new record highs before long. Still, in a memo last week, he said the price of Bitcoin would climb to $80,000 if the circumstances were right for political changes.
He specifically believed that either a Republican would win in the 2024 election or a split government would result in the best conditions for a crypto rally after the 2024 election. However, Hougan’s more recent comments hint that the market might not be so patient with respect to its moves until the election.
After Harris’s announcement, the stock rallied steeply, and he’s now reconsidering his timeline. I’m not so sure after today. People aren’t rallying on Monday because they think crypto is going to take off, only because they don’t want to miss out, he explained.
Conclusion
With Bitcoin’s upward momentum driven by political changes and investor sentiment, a big bump is likely to occur. Matt Hougan’s point about the enormous amount of capital waiting for regulatory clarity means that even tiny positive signals can take the market higher. Crypto’s future is coming up, moving fast, with investors closely situated on the upcoming catalyst.
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