Bitwise executive: “Most bad news already priced in… Bitcoin (BTC) still has room to fall”

JH Kim

Summary

Bitwise CIO Matt Hougan said that in the wake of the recent sharp drop in Bitcoin and digital assets, much of the key bad news has already been largely priced in.
He said the selloff is not a failure of digital assets themselves, but the result of a combination of the business cycle, deleveraging, and macro risk-off sentiment.
Hougan added that while further downside in Bitcoin remains possible, a repeat of a broad-based collapse like 2022 is unlikely.

An analysis has emerged suggesting that much of the key negative news has already been largely priced in, following the recent sharp sell-off across the digital asset (cryptocurrency) market, including Bitcoin (BTC).

According to The Block, a digital-asset news outlet, on the 6th (local time), Bitwise Chief Investment Officer (CIO) Matt Hougan said of the recent market conditions: “This selloff is less a failure of digital assets themselves than the result of a confluence of cyclical selling, deleveraging, and broader macro risk-off sentiment.”

He added, “Gold and silver have been sold off sharply recently, and U.S. equities are also under pressure due to slowing growth, the interest-rate path, and uncertainty around capital spending,” explaining that “the pullback in digital assets is an extension of this macro backdrop.”

Hougan distinguished the current phase from the 2022 bear market. He said, “There have been significant outflows, but unlike 2022, we are not seeing signs of systemic stress across the digital-asset ecosystem, such as exchange bankruptcies or a breakdown in market infrastructure.”

Still, he noted that “the possibility of further declines in Bitcoin’s price remains,” while adding that “as Bitcoin has matured through prior cycles, the likelihood of a broad-based collapse like 2022 is low.”