San Francisco, CA – Bitcoin, the popular cryptocurrency, is showing signs of stability as its price fluctuations have decreased significantly over the past decade, according to Matt Hougan of Bitwise Asset Management.
Hougan, the firm’s chief investment officer, attributed the recent calmness in the bitcoin market to a balance between supply and demand, driven by the introduction of new sources of demand through ETFs. This shift has led to a more predictable market for investors.
The launch of the first bitcoin exchange-traded funds on January 11 sparked a surge in bitcoin prices, with the asset increasing by over 50% since then, reaching an all-time high of nearly $74,000. Despite this growth, Hougan acknowledges that bitcoin’s volatile nature may not be suitable for all investors.
While Bitwise remains optimistic about bitcoin’s growth prospects, ProShares has introduced a Short Bitcoin Strategy ETF for investors looking to profit from potential downturns in the market. However, this strategy has seen a decline of 42% so far this year and nearly 70% over the past year.
Simeon Hyman, global investment strategist at ProShares, emphasized the resilience of bitcoin as an alternative investment, citing its historical strength even before the introduction of spot bitcoin ETFs. He noted an increasing interest from long-term investors seeking to diversify their portfolios.
In addition to the Short Bitcoin Strategy ETF, ProShares also operates a long-bitcoin ETF, the ProShares Bitcoin Strategy ETF, which has seen significant gains of 55% since the beginning of the year and 111% over the past year.
As of Friday evening, bitcoin has experienced a remarkable 180% increase in value over the past 12 months, underscoring its ongoing appeal to investors seeking exposure to the cryptocurrency market. With the recent developments in the bitcoin market, it will be interesting to see how these trends continue to evolve in the coming months.