Bitcoin has experienced a tumultuous year, but according to Bitwise Chief Investment Officer Matt Hougan, there is a significant change underway in its path. Hougan believes this is the “best time in history” to buy Bitcoin on a risk-adjusted basis.
### Bitcoin’s Historic Risks Are Gone
In his recent blog post, Hougan shared his early experiences with Bitcoin, recalling how in February 2011, when Bitcoin first crossed the $1 mark, it appeared to be a high-risk investment. Back then, investing in BTC came with numerous risks, such as unregulated exchanges, technology uncertainties, and custody concerns. The primary exchange at the time was New Liberty Financial, which lacked credibility. Hougan admits that despite recognizing Bitcoin’s potential, he did not invest, a decision he regrets alongside many others who missed out on its massive price gain.
However, Hougan asserts that today’s BTC market is vastly different. He believes that major existential risks associated with Bitcoin have been largely mitigated. He highlights the emergence of regulated, reliable exchanges like Coinbase and institutional-grade custody services from companies like Fidelity. Concerns over Bitcoin’s use in illegal activities have also been addressed as regulations have become more defined and widespread.
Despite these advances, Hougan acknowledges one lingering concern—the threat of a government ban on Bitcoin, a scenario that could significantly impact its growth and value. He often draws a parallel to the US government’s 1933 confiscation of gold. However, the signing of an executive order by President Donald Trump to establish the US Strategic Bitcoin Reserve has alleviated this fear. Hougan argues that this move eliminates the last major existential risk for Bitcoin.
The establishment of this reserve indicates that the US government recognizes Bitcoin’s potential as a strategic asset, positioning it as a backup should the US dollar’s dominance as the global reserve currency be questioned. Hougan notes that this decision is not an endorsement of Bitcoin as a threat to the dollar but rather an acknowledgment that it is a better alternative compared to other global currencies, such as the Chinese yuan.
According to Hougan, this action by the US government signifies Bitcoin’s acceptance as a legitimate, stable asset within the global financial system. With the removal of this final existential threat, he believes now is the ideal time to invest in Bitcoin.
### Major Turning Point?
Beyond Bitcoin, recent regulatory developments, particularly following Donald Trump’s reelection as US President, have had a significant impact on stablecoins, meme coins, and the broader cryptocurrency market. The Trump administration has expressed support for stablecoins through legislation like the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, which seeks to establish a regulatory framework for these assets.
Last month, the US Securities and Exchange Commission (SEC) clarified that most meme coins are not considered securities under federal law. This means transactions involving these coins do not require registration with the securities regulator, and holders do not receive federal securities law protections.
Meanwhile, the SEC has recently withdrawn several legal actions against cryptocurrency entities, marking a substantial shift in its regulatory approach.
Twitter: “With major risks mitigated and government support solidifying, Matt Hougan from Bitwise suggests now may be the best time in history to invest in Bitcoin. #Bitcoin #Crypto #Investment”
