Bitcoinhas fallen below $100,000, its lowest level since June, raising concerns that the worst is yet to come: another so-called “crypto winter” — the period in which the market struggles every time a digital currency sells off sharply in a short period of time — is yet to come.
However, Matt Hogan, chief investment officer at Bitwise, said he believes retail investors are in “maximum desperation” mode, which is why he is betting that a bottom in crypto prices may come sooner rather than later. With Wall Street institutional investors and financial advisors backing Bitcoin, and crypto ETFs growing, he’s even willing to take the bold step to argue that it’s not unreasonable for Bitcoin to reach a new all-time high by the end of the year amidst massive selling.
“This is pretty much a tale of two markets,” he told CNBC’s “Crypto World” on Tuesday. “Crypto retail is in a state of extreme desperation. We’ve seen a collapse in leverage. … Certain crypto-native retail markets are at an all-time low that I’ve never seen before,” he said.
However, Hogan believes more crypto trading will continue to migrate to institutional-driven markets, saying, “Interestingly, that market remains bullish.”
“When I talk to financial institutions and financial advisors, they’re still excited about allocations to asset classes that, if you look back and look over the course of the year, are still delivering very strong returns. So my view on the market is we’ve got to get through this retail flashout. We’ve got to bottom out from a sentiment standpoint as well. I think we’re very close to that,” he added.
Bitcoin and Ether prices over the past year.
The boom in the launch of crypto exchange-traded funds, such as iShares Bitcoin Trust (IBIT) and Fidelity Wise Origin Bitcoin Fund (FBTC) and Grayscale Bitcoin Trust (GBTC) have changed their investor mix, and although weekly inflows into these ETFs have slowed since the second quarter of this year, “we continue to see strong inflows into Bitcoin,” Hogan said.
He expects more support for cryptocurrencies will materialize towards the end of the year among financial advisors, who will see the current sell-off as an “opportunity to show clients that they understand where this market is going.”
According to him, Bitwise’s Solana Staking ETF (BSOL) brought in more than $400 million in inflows in its first week, but has fallen sharply due to the recent crypto recession, losing nearly 20% since its debut on October 28.
This chart shows BSOL 5 days
last week, strategy CEO Michael Saylor told CNBC that he believes Bitcoin could reach $150,000 by the end of the year, one of several recent bullish views on cryptocurrencies that at this point at least seem ill-timed. But Hogan said he doesn’t think this is a far-fetched decision, even though Bitcoin is hovering around six-month lows.
“I think Bitcoin could easily end the year at a new all-time high,” Hogan said. “That means going from about $125,000 to $130,000. We’ll have to wait and see if we can get to $150,000.”
“Sellers are nearing exhaustion, but I think buyers are still relatively hungry. And if those two somehow intersect, I think we could end the year close to all-time highs again or at new all-time highs. And with any luck, we’ll hit Saylor’s goal as well,” he said.
Institutional investors, who Hogan described as “rather interested in what’s going on at the fundamentals level of cryptocurrencies,” will begin to drive the market forward. “But this retail sentiment sweep needs to end…I think we’re closer to the end than we were at the beginning…but there’s always the potential for a little more downside.”
