Bitcoin rally will extend to 'summer and beyond': Strategist

Bitcoin (BTC-USD) is gaining back ground as it hovers below $67,000 Monday morning, re-approaching its all-time high reached in November 2021. The cryptocurrency's resurgence is thanks in part to the demand for spot bitcoin ETF offerings, approved by the Securities and Exchange Commission (SEC) in January.

Bitwise Asset Management CIO Matt Hougan — whose firm manages its own spot bitcoin ETF (BITB) — sits down with Yahoo Finance to talk about the activity bolstering digital asset prices, what trend could be detrimental to bitcoin's progress, and the importance of the 2024 US presidential election on crypto regulation.

"The thing that could stop bitcoin from rallying is if long-term bitcoin investors decide to sell. The ETF is soaking up more than 100% of the net new supply, so it's only when people who have been holding bitcoin for six months, a year, two years, three years, decide to sell that we could see prices pull back because I don't see the ETF demand going anywhere," Hougan explains.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Luke Carberry Mogan.

Video Transcript

[VIDEO LOGO]

BRIAN SMITH: Bitcoin inching closer to all-time highs as the crypto market certainly reaps the benefits from the addition of spot Bitcoin ETFs here, plus more applications for Ethereum ETFs. All of this is positive for the broader crypto space.

Here to discuss what's next for these digital assets, we've got Matt Hogan, who is the Bitwise Asset management chief investment officer here. Matt, great to see you. What, from your stance, is the biggest catalyst that is continuing to move crypto higher and Bitcoin specifically after we were anticipating, more largely, a sell the news type of event once the Bitcoin ETFs finally went public?

MATT HOGAN: That's right. But I think the demand for these ETFs far exceeded anyone's expectations. By any measure, these are the most successful ETF launches of all time. And as you mentioned in the last segment, sometimes it comes down to simple supply and demand.

If we looked last week, these Bitcoin ETFs purchased over 30,000 Bitcoin net and Bitcoin miners only produced 6,000 Bitcoin. And as you said, that number is going to fall in half, the amount miners are producing, in a few weeks. More demand, reduced new supply. Sometimes, it's as easy as that to explain why the price is going up.

- Yeah, Matt, when you have Bitcoin right above 66,000, coming off its best month that we have seen since 2020, is there anything, do you think, standing in the way of this massive rally that we're seeing?

MATT HOGAN: The thing that could stop Bitcoin from rallying is if long-term Bitcoin investors decide to sell. Because the ETF is soaking up more than 100% of the net new supply. So it's only when people have been holding Bitcoin for six months, a year, two years, three years decide to sell that we could see prices pull back. Because I don't see the ETF demand going anywhere.

You could see some of that selling as we breach new all-time highs, but I think we're going significantly higher. I think this is a bull market with legs. I think we'll still be talking to this-- about this into the summer and beyond.

BRIAN SMITH: Matt, I'm not sure I entirely realize just how many people are heading to the ballot boxes this year internationally. You've got 64 countries holding elections here, and what's anticipated to be a record year for the number of people voting. Here's why I bring that up, that also means that in some areas in the world, crypto might be on the ballot as well. Are there large elections that those who are holding or holding Bitcoin and other cryptocurrency assets should be paying close attention to?

MATT HOGAN: Absolutely. This is actually a big catalyst for crypto this year. Yes, the ETFs are important, yes, mining is important, potential fed rate cuts are important. But the election could be a huge catalyst.

If you look just here in the US, about 100 million Americans have some exposure to crypto, according to statistics. Even if 5% of them incorporate crypto into how they vote, that could tilt the elections. And you're already seeing politicians start to play to this, you're seeing momentum for crypto in Washington.

2022, early 2023, crypto faced huge regulatory headwinds. I think those are going to flip to tailwinds as we enter the end of this year. And it's part of the mainstreaming of crypto, which is the meta narrative for this bull market.

- Matt, when it comes to Biden versus Trump, it looks like that's going to be the likely match-up here in 2024. Is one better than the other for crypto?

MATT HOGAN: Look, crypto wins as long as there's not a complete Democratic sweep of both Houses of Congress and the presidency. Again, the tide is rising for crypto across the board. I think either would be fine.

Maybe on the edges, much of crypto would prefer a Trump victory, less harsh regulation from the top down at the SEC. But again, unless there is a complete Democratic sweep, I think it's positive for crypto. I think, generally, the Washington trends are moving in crypto's direction.