has been a real winner since the US-Iran war broke out at the end of February.
Over the six weeks, Bitcoin has greatly outperformed, and we have been continuing to monitor Bitcoin, which is currently straddling that 74,000 level.
Now Bitcoin has an act for rallying during geopolitical uncertainty surging towards the on Tuesday to the top of its two month trading range and also jumping as.
Much as 4% briefly crossed the $76,000 mark and hit a four week high before prices settled back around $74,000 and this breakout comes as traders were increasingly hopeful that the US and Iran can strike a deal to end their conflict while the industry is still looking for a confirmed breakout to hit some of the sky-high 2026 price targets analysts were expecting coming into the year.
Joining us this morning is Matt Hougan, the CIO of Bitwise Asset Management.
Matt, good morning.
Thank you so much for joining us.
So we are looking at Bitcoin near its highest level since February 5th the sell-off took off, but this goes without saying that Bitcoin outperformed during the U.S.Iran war.
So why is buying Bitcoin like making two bets at once?
Oh, absolutely.
That's, that's right.
When you buy Bitcoin, you are making two bets at once, and this explains why it's rallying during the Iran crisis.
The first bet you're making is the one we're all familiar with.
Bitcoin as a store of value, a version of digital gold.
But you get along with that this extra bet that someday Bitcoin will become a real international currency that's used to settle international transactions on an apolitical financial rail.
It's the only instrument in the world that can do that.
The reason it's been rallying during this Iran crisis is that you see the probability of that happening grow.
Why?
Because Iran sits at the center of sanctions, of the weaponization of the SWIFT network.
You're starting to see countries talk about settling major international transactions in Bitcoin, the only apolitical currency you can do that.
That's starting to happen during this conflict.
That's the reason Bitcoin has been rallying.
It's a nice 2 for 1 bet.
Let's take a look at the other crypto major which is and crypto spot trading volumes jumped 18% over the last week as the broader market shows real signs of recovery here, but it has outperformed since the war broke out.
So what do you think crypto goes from here and you see an off season on the horizon.
Well, look, I, I think there are a lot of positive catalysts in crypto right now.
You have major firms like Morgan Stanley launching Bitcoin ETFs.
You have firms like Charles Schwab telling investors that they should put between 1 and 8% of their portfolio into crypto.
Specific to Ethereum.
You have continued growth of the stablecoin and real world asset space.
Stablecoin AUM just topped $300 billion at a new.
All-time high.
You have all of this happening at a time when the prices are still well off their all-time highs.
I think that the conditions are ripe for a pretty strong rally into the end of the year.
As regards an alt season, I don't expect a broad-based alt season, the era of crypto where all coins rallied is over.
What we're going to see toward the end of this year is well positioned assets.
Assets like Ethereum, assets like Avalanche, assets like Solana, assets like Chain Link, assets like Hyperliquid, you'll see select high quality assets rally, and then other assets that aren't finding real world traction, those will fade into the background.
So not a classic alt season, but to be clear, there are real opportunities in high quality alts if investors can pick and choose between the winners and the losers. and building on what you just said that, I do want to get your take on crypto equity.
So if crypto breaks out, do you think investors should expect stronger gains from some names like strategy and also what about funds in terms of ETFs.
Yeah, absolutely.
You know, I do think strategy is well positioned for a rally in Bitcoin.
It's almost like a levered bet on Bitcoin, so you can expect it to outperform when Bitcoin is doing well, underperform when Bitcoin is doing poorly.
I'm really excited about some of the crypto-specific financial services firms, firms like.
Coinbase firms like Circle, and indeed packages of those firms.
We run an ETF, BITQ that holds the largest pure play equities in the crypto market.
I think they may be systematically undervalued by the market.
They don't realize the degree to which America's financial rails are moving on chain.
People don't realize the speed at which that is happening.
These firms captured in ETFs like BITQ are going to benefit from those trends.
I think that's going to become extremely apparent in the second half of the year as we get more progress on regulation, more major Wall Street firms building in this space.
So I am excited about that space as well. to keep our eyes on as we head into the rest of this year, but you have been on the show, Matt with a $1 million price target for Bitcoin.
So why is Bitcoin destined to hit a million dollars?
And before we get to that, what are your short as well as midterm price targets?
Yeah, look, I think we're at a bottoming process broadly in crypto.
So to start from a short term perspective, I suspect we're in this channel for a while, between $6,000,000 and $80,000 but I think we will break out of that by the end of the year and push back towards our all-time highs.
There are just too many.
Positive catalyst.
Too much institutional interest, too much progress from firms like Morgan Stanley and Schwab, too much activity at the SEC to keep crypto down for long.
So I'm bullish into the end of the year, although we may have to work our way sideways for a little bit.
As far as a million dollars Bitcoin, that's really driven by some very simple math.
All that needs to happen for Bitcoin to get to a million dollars is for the store value market, sort of golden Bitcoin, to continue to grow as it has for the last 20 years.
Just keep growing at the trend we've seen for the last 20 years, and then for Bitcoin to go from about 6% of that market to 17% of that market by 2035.
As millennials age, as Gen Xers get richer, as more institutions adopt it, those strike me as pretty conservative outcomes.
I know a million dollars sounds far out.
It's a very large number, but if just those two things happen the store value market grows, Bitcoin keeps getting market share, that's where the math tells us we'll end up, and I think we'll get there by 2035.
And that very quickly we have about 60 seconds here and I know it's not enough time, but I do want to get your take on quantum computing as a threat.
So I understand you refer to this as an institutional level flood factor rather than an imminent threat to Bitcoin.
So can you explain this in a nutshell?
Yeah, look, quantum is interesting in that if the crypto community, if the Bitcoin community ignored it, it would be a major threat.
The reason I'm not worried about it is in part because some major voices in crypto have focused attention on it.
Developers in the community are now focused on it, so it's one of those problems that is solvable if it gets the attention it deserves.
It's now getting the attention it deserves.
I don't think the institutional crowd has.
Caught up with the progress the Bitcoin core developer community has made towards starting to address quantum.
Look, I think we will solve the problem before it really harms the industry.
Quantum is something that affects not just Bitcoin, but the broader finance community.
It's good that we're focused on it, but if we focus on it, we can solve this problem.
I don't think anything stops the train of where Bitcoin is going long term, and that includes quantum risk.
I think we will get past it and move beyond.
Well, Matt, we will have to leave it there for today, but as always, great talking to you.
Thank you so much for joining us and thank you so much for all of your insights.
Thank you for having me.
