Bitcoin may start to lose its reputation as a volatile asset.
According to Bitwise Asset Management’s Matt Hougan, the cryptocurrency’s wild value swings have come down considerably over the previous decade.
“What’s driving the bitcoin market right now is a simple demand-supply imbalance,” the agency’s chief funding officer instructed CNBC’s “ETF Edge” on Monday. “We have this huge new source of demand from these ETFs, and we have supply that’s inelastic.”
On Jan. 11, the primary bitcoin exchange-traded funds began trading. Since then, the asset is up greater than 50%. Bitcoin hit an all-time excessive this week of slightly below $74,000.
Yet, Hougan acknowledges it may not be for everybody.
“It moves around a lot. Some people find it difficult to understand,” Hougan stated.
While Bitwise is betting on bitcoin’s progress, ProShares has an ETF wanting to revenue from losses with its Short Bitcoin Strategy ETF. It’s down 42% to this point this yr and has plummeted virtually 70% over the previous yr.
“To quote Mark Twain, ‘The reports of our death have been quite exaggerated,'” ProShares’ Simeon Hyman instructed CNBC. “We’re happy to be here, and we think we’re serving as a key alternative.”
Hyman, the agency’s international funding strategist, notes bitcoin’s historic power has been happening a lot longer than the launch of the spot bitcoin ETFs.
“This is the month of the anniversary of the collapse of crypto-linked financial institutions. Last year, bitcoin was going up then, too,” Hyman stated. “I think there are longer-term folks who are starting to come in for asset allocation and diversification purposes.”
Hyman’s ProShares additionally operates a long-bitcoin ETF: ProShares Bitcoin Strategy ETF. It’s up 55% since Jan.1 and has gained 111% previously yr.
As of Friday night, bitcoin is up 180% over the previous 12 months.