Mm.
Earlier this week, Bitcoin seeing a flash crash and plunging below 111,000 after a whale sold 24,000 Bitcoin and this did trigger a force selling and also racing some of the gains from Jay Powell's speech last week.
While Ether is showing strength against Bitcoin, rallying as much as 5% in the previous session, while Bitcoin. a gain of 1%.
Now despite this, its derivatives market is signaling some overheating.
Leverage did reach record levels, indicating excessive optimism and increasing risk of liquidations.
While the long-term outlook does remain bullish, the risk of short term volatility is high due to rising leverage.
Well, joining us this morning to weigh in is Matt Hogan, CIO.
Of Bitwise asset management.
Matt, good morning.
Thank you so much for joining us today.
So first and foremost, we're keeping a close eye on this morning, back up of 4600.
But what factors do you think will drive Bitcoin's compound annual growth rate of 28.3% over the next decade?
And what's going on with this price action this morning?
Yeah, it's great to be here.
Thanks for those questions.
I think specific to Bitcoin, it speaks to how you intro this session, which is in the short term there are all these reasons to be concerned.
Maybe there's a little bit of excess leverage.
Maybe August and September are historically the worst months for the crypto market, but we published our new report on long-term capital market assumptions, taking a 10 year view.
And if you step back and take that 10 year view, what you see institutions that need to buy $1 trillion or more of Bitcoin over the next 10 years.
You see rising concern about debts and deficits.
You see an improving regulatory environment that tells you that prices are going higher long term.
So these pullbacks that we're seeing, what's happening today, I consider sort of a typical summer doldrums period.
I consider every single pullback an opportunity to build a position, and I Extraordinarily excited about the long term trajectory of Bitcoin.
I think we'll be much higher by the end of the year.
I think 2026 will be a fantastic year as well.
And Eth is sort of that square.
There's a relentless institutional bid for Ethereum.
Institutions have very little exposure.
They're now very excited about stablecoins and tokenization.
They see Eth as the primary play, so I think Eth's outlook for the remainder of the year is extraordinarily bright.
Yeah, and Matt, you mentioned 2026 and only 4 months away.
Hard to believe since the first time we had you on the show was in the beginning of 2024 here at the New York Stock Exchange when we saw spot Bitcoin ETF's first launch.
But what strategy should investors be using right now to mitigate some of that volatility while also taking advantage of long-term growth potential?
Yeah, I think for most investors the right thing to do is to build your position through a dollar cost averaging strategy, which means relentlessly investing whether the market is up, down, or sideways.
Those are investors who don't have exposure to crypto yet and realize it's now an institutional asset and they need exposure.
You need to detach from the emotion.
And just build your position over time.
That's one way to actually turn the volatility into profits for you because you'll be buying on the dips along the way.
I think for people who are more concerned or maybe already have a position and are worried about it, there's some interesting things you can do from an options overlay strategy.
We work with a lot of large Bitcoin investments. is to generate income on options positions using options for them that can mitigate that volatility and turn it into, you know, dollars that they can use.
But for most investors, the answer to markets like this are to see every dip as an opportunity to build in a position that I think is going substantially higher over the next 5 or 10 years.
Yeah, and Matt, while we have you here, I do have to ask you about your recent social media posts.
So you posted about this on an X post and suggested setting a buy target in events and also keeping it visible so that way when a dip does occur and sentiment shifts, you'll be ready to stick to your plan with discipline.
But how can investors actually maintain discipline and also avoid FOMO during market fluctuations because we've seen plenty of those.
Yeah, I'm telling you it's the power of the sticky note.
Look, I've been doing this full time at Bitwise for close to 8 years.
I've probably had 1000 conversations with professional investors who said I'll buy Bitcoin if it just pulls back to, let's say 15% below where it is today.
But when those pullbacks come, the market doesn't feel as good.
Right, the market doesn't feel as good to you as an investor today as it did shortly after the J.
Powell speech.
But look at this.
What J Powell said is still true.
The Fed is turning dovish.
We're going to get lower interest rates.
We're probably going to get easier monetary conditions.
Those are going to be good for Bitcoin.
So the fact that the price is down from 20 to 111 is an opportunity.
The market's on sale.
You should be excited.
I said it's the power of the sticky note because what I do is I put a sticky note on my computer that says I will buy Bitcoin, ET, whatever you want to say at a certain price.
So when it gets to that price, I'm looking at it.
I know I made that decision.
And I can act just that simple act of writing it down instead of just saying it in your head, I've seen help people get invested and I've seen those people do very well over time.
So think about that sticky note.
OK, Matt, well, I will be thinking about that sticky note.
And finally, before I let you go, I understand that you are challenging a major trad fly institution over efforts to curb stablecoin yields, and this does come amid a growing clash between Wall Street and crypto as banks push lawmakers to amend the Genius Act and also limit interest bearing stablecoins.
So in a nutshell, what does all this mean?
Break this down for us.
Yeah, you know, the existing Genius Act and the effort by Wall Street firms to constrain stablecoin growth, they've made it impossible for stablecoins to pay interest to people who hold them.
That seems ridiculous.
We should let the financial system work for us.
We shouldn't prevent financial institutions from giving us interest on our money.
It's just shocking to me.
The only reason that is in there is because the existing legacy financial system is running scared.
They see that stablecoins are a better system for people to hold dollars and to save and invest, and they don't want to face head to head competition.
I would like Washington to realize the financial system can be better than it is today and unleash stablecoins to go head to head with JPMorgan and others, you know, I posted about Chase's checking account, which pays 0.01% interest.
That's absurd.
Treasuries are yielding 4%.
If I have money in your bank, I should be getting that 4%.
I would.
To see the Genius Act rewritten to allow stablecoins to pay interest.
It would create a better system.
It would be better for middle class Americans, and I hope that we get there.
Let's have a fair fight between this crypto system and the legacy financial system.
I don't want to see sort of fears from the legacy system constraining what we can do in crypto.
We can build a better financial system, and I hope that we do.
OK, Matt, we will have to leave it there, but I look forward to speaking with you once uh September kicks off and hopefully we can have you live back on the set here at the New York Stock Exchange.
Thank you so much for joining me.
Thanks for having me.
I appreciate it.
