Bitwise CIO: “The biggest driver of Bitcoin (BTC) weakness is the four-year cycle…limited impact on ETF growth”

A four-year cycle has been cited as the biggest backdrop to the recent pullback in Bitcoin (BTC). The view is that despite near-term weakness, it is unlikely to meaningfully affect the structural growth of cryptocurrency exchange-traded funds (ETFs).

According to CNBC on the 10th (local time), Bitwise Chief Investment Officer (CIO) Matt Hougan said in an interview that the defining factor behind Bitcoin’s recent decline is the nature of its four-year cycle. He explained that the correction was not driven by a single factor.

“Recently, gold and artificial intelligence (AI)-related stocks have been drawing more attention than crypto assets,” Hougan said, adding that “a range of factors—including quantum-computing risk and concerns over Kevin Warsh, the nominee for Fed chair—are being amplified simultaneously in a bearish market phase.”

He assessed that while this environment is increasing Bitcoin’s price volatility, it is not damaging the market’s long-term structure. In particular, he sees the negative impact on the crypto ETF market as limited.

“The current Bitcoin weakness won’t fundamentally stop the growth of crypto ETFs,” Hougan said, stressing that “the fact that Bitcoin’s total issuance is capped at 21 million coins does not change.”

He added that “demand through derivatives ultimately flows into the spot market,” and that “separately from short-term price adjustments, the structural trend of institutional capital flowing in is likely to remain intact.”