The crypto market seems to be in trouble again, but one experienced investor says this could be the exact signal to keep calm.
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Bitwise Chief Investment Officer Matt Hougan believes that of Bitcoin deep sale – the fact that prices have now fallen below $102,000 for the first time in the last five months – has more to do with panic than fundamentals.
Retail sentiment on ‘Max Desperation’
Hougan told CNBC this week that small traders are reaching a breaking point. “It’s almost a tale of two markets,” he said, describing how he sees it “maximum despair” among private investors after months of heavy losses and debt crises.
He called the vote the most depressed that he has ever witnessed in crypto. For him, this level of hopelessness could be the final stage before the market regains its footing.
Institutional flows remain important
While smaller traders are retreating, larger investors appear to be sticking around. According to reports, financial advisors and institutional funds are still adding to positions through Bitcoin ETFs such as iShares Bitcoin Trust (IBIT)Fidelity Wise Origin Bitcoin Fund (FBTC) and Grayscale Bitcoin Trust (GBTC).
Weekly inflows have declined since the middle of the year but remain positive – a sign, Hougan says, that big money has not lost confidence.
Hougan argues that this gap between retail panic and institutional confidence could determine the market’s recovery.
“When I talk to advisors and institutions,” he said, “they are still excited to invest in an asset class that, if you zoom out, has delivered strong returns over the past year.”
Solana is deploying interest and ETF activity
The growing influence of crypto funds goes beyond Bitcoin. Hougan said Bitwise’s new Solana Bet ETF (BSOL) raked in over $400 million in its first week before falling nearly 20% since its launch on October 28.
Still, he sees strong interest in professionally managed cryptocurrency exposure among investors who prefer structured products to direct trading.
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Not everyone agrees on how quickly a recovery could come. Strategy CEO Michael Saylor recently predicted that Bitcoin could reach $150,000 by the end of the year — a call Hougan considers daring but not impossible.
He said a move toward $125,000 or even $130,000 is feasible if selling pressure continues to ease and demand from institutions grows.
For the time being, the market still feels vulnerable. Hougan admits there could be more negative impacts before prices turn around, but he thinks the end of the sell-off is near.
Retail sentiment may be collapsing, but institutional optimism is holding strong – and that could fuel Bitcoin’s next rally, he says.
Featured image from Unsplash, chart from TradingView