Unbelievable! Discover the Hidden Forces Driving Crypto Prices to New Heights! 🚀

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As the market rally continues, one might think the world is spinning on its axis with excitement, yet here we are, with Bitwise’s Chief Investment Officer, Matt Hougan, waving his hands like a conductor of a symphony, outlining bullish catalysts that the crypto market seems to have overlooked, as if they were mere specks of dust on a grand piano. 🎹

Governments and Central Banks: The Unlikely Heroes of Crypto

In a memo that could rival the most riveting of novels, Hougan shared his thoughts with clients on a Wednesday, a day that often feels like the middle child of the week, where excitement is neither here nor there. He pointed out that there’s “a lot to be excited about” now, including crypto regulation and legislation moving in a positive direction, stablecoins gaining momentum, corporate crypto purchases soaring, exchange-traded funds (ETFs) experiencing remarkable adoption, and the “much-needed altcoin energy” being injected into the broader crypto market by Ethereum’s (ETH) rally. It’s as if the universe conspired to throw a grand party, and yet, the guests are still outside, debating whether to enter. 🎉

However, he lamented that the “problem (…) is all these are well-known,” which could suggest that the market is “underestimating the scale of each of these developments.” To our dear Bitwise CIO, there are “significant upside surprises in store for the market through the end of the year,” which could push prices substantially higher in the coming months and the start of 2026. One can only imagine the market as a sleeping giant, snoring away while treasures lie beneath its slumbering form.

Hougan listed governments potentially purchasing Bitcoin (BTC) as the first key catalyst not priced in. He explained that “The Three Horsemen of Bitcoin Demand” for this year were ETFs, corporations, and governments, but only the first two have delivered, leaving the third horseman to wander aimlessly in the fields of uncertainty. 🐴

Notably, ETFs have purchased 183,126 BTC, according to Bitwise’s CIO, while public corporations have acquired 354,744 BTC. Meanwhile, governments have failed to show up, despite some “dribs and drabs” from jurisdictions like Pakistan, Abu Dhabi, and even the US. He emphasized that the US Strategic Bitcoin Reserve (SBR), established by President Donald Trump in March, only holds assets seized through criminal forfeiture, as if the government were playing a game of Monopoly, but only collecting the “Go to Jail” cards.

In the memo, Hougan affirmed that, based on the conversations he is having at Bitwise, countries and central banks “are moving,” albeit slowly, like a tortoise in a race against a hare. He clarified that he doesn’t believe “there will be a rush of national announcements by year-end,” but suspects there will be enough to “establish this as a major potential catalyst for 2026. That realization alone could push prices substantially higher.”

It’s worth noting that US Treasury Secretary Scott Bessent revealed on Thursday morning that the government will not be purchasing additional Bitcoin for its SBR. Instead, the US will stop selling these assets and continue to build up the reserve’s stash through confiscated BTC, as if they were collecting stamps instead of currency.

What Else Has Not Been Priced In?

Bitcoin trading near all-time highs while interest rates hover near historical highs is unusual, the Bitwise CIO said when discussing the second factor. Despite investors having priced in multiple rate cuts by year’s end, he asserted that the market is missing a much bigger story, like a child missing the forest for the trees.

Notably, the Trump administration “has a strong desire” for a weaker dollar and a more dovish Federal Reserve. The administration is “strongly signaling that it wants much lower rates and a much weaker dollar.” To him, Bitcoin could trade significantly higher with much lower rates and a much weaker dollar due to money printing, as if the government were trying to inflate a balloon that just won’t pop.

Hougan also underscored the diminishing volatility trend as a third potential catalyst, as both BTC’s volatility and the rate at which its volatility is changing have fallen dramatically since the launch of spot Bitcoin ETFs in January 2024. It’s as if Bitcoin has decided to take a yoga class and is now mastering the art of calmness.

The growth of ETFs and corporate purchases injected new types of buyers into the crypto market, and advances on the regulatory and legislative side dramatically reduced risk in the market. I suspect this is the “new normal” for bitcoin. It is now roughly as volatile as high-volatility tech stocks, like Nvidia. Who would have thought? 🤔

Lastly, he suggested that a comeback of Initial Coin Offerings (ICOs) could be around the corner, bringing a wave of new capital. Hougan argued that ICOs have had a terrible reputation since 2018, which led most investors and observers to write them off “as damaged goods.” It’s like finding a vintage wine bottle in the attic, only to discover it’s turned to vinegar.

However, Securities and Exchange Commission’s (SEC) Chairman, Paul Atkins, recently “laid out a vision for a rebirth of ICOs” with his Project Crypto speech. “Unleashing a new ICO Market 2.0 could draw in significant new capital to the crypto market,” Hougan affirmed, as if he were a magician pulling a rabbit out of a hat.

“Markets don’t rise on good news. They rise on good news that is not priced in,” he affirmed, concluding that “the market in general underappreciates the scale of the bull market taking place in crypto. But I also think it’s overlooking some specific catalysts that will play out in the months and years to come.”

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2025-08-15 10:58