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Author: Matt Hougan, Chief Investment Officer of Bitwise; Compiled by: 0xjs@Bitlink Vision
There is no doubt that cryptocurrency won the November 5 election.
Affected by this news, the market rose sharply.
Republicans write policies that support cryptocurrencies into theirParty Program, it decisively won the presidential election, controlled the Senate, and seemed to be expected to continue controlling the House.The Republican Party will take office in January next year and have strong power to fulfill its campaign commitments to the cryptocurrency industry, including:
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Changes in the leadership of the US SEC;
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The end of “Road Operation 2.0” limits the ability of cryptocurrencies to enter traditional banking systems;
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Support cryptocurrency legislation on stablecoins, market structure, etc.
As I write this article, Bitcoin trading prices hit record highs and other crypto assets also rose sharply.In the short term, I don’t know whether we will hold the high or fall.But in the medium and long term, I think we will go higher.
Specifically:I expect Bitcoin to be close to $100,000 this year and close to $200,000 by 2025.Other crypto assets (previously facing more regulatory risks) may perform better.
I’ve never been more optimistic than I am now.Below, I would like to share three key ideas about the prospects of cryptocurrency.
Idea 1: Cryptocurrency loosening – We can finally see what cryptocurrencies can do
Crypto’s operations have been at a loss for the past four years.
It faces numerous lawsuits from the U.S. SEC and hostile actions from other regulators.Even basic rights, such as access to banking services or the custody of Bitcoin in an institutional environment, are restricted or threatened.
This harsh environment casts a huge shadow on the entire industry, hindering mainstream adoption and frightens institutional investors.For TradFi companies, investing in disruptive new technologies is one thing, and investing in technologies threatened by ongoing regulation is another.
Now that all has disappeared, and in a significant election, Washington will have a congress and president that supports cryptocurrencies.
I think unveiling this veil will accelerate the development of cryptocurrencies in all aspects.It will drive more institutional investment, inspire the widespread adoption of encryption technology in the financial services industry, and accelerate the development of innovation and mainstream applications.
Cryptocurrencies have long promised to change society in a positive way; now we have the opportunity to see its attempts.
We are entering the golden age of cryptocurrencies.
Idea 2: Remember the background – Prices have risen before the election
Regardless of the outcome of the November 5 election, I am strongly optimistic about cryptocurrencies.The industry is currently facing multiple positives, including:
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Institutional demand grows rapidly: a large inflow of Bitcoin ETFs (over $23 billion), 60% of the top 25 hedge funds hold Bitcoin, and blue-chip institutions such as Emory University now disclose new positions in cryptocurrencies, all of whichThis reflects.The benefits are amazing: trillions of institutional assets currently have 0% exposure to cryptocurrencies; this has begun to change before the November 5 results are released and will accelerate from now on.
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Supply Constrained: We almost forgot, but the Bitcoin halving in April 2024 reduced billions of new supply to the market each year.Limited supply will meet increased demand in the coming months.
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Debt, deficits and interest rate cuts: Unfortunately, the election hasn’t changed one thing: the U.S. deficit is now $36 trillion and it’s $1 trillion every 100 days.The Congressional Budget Office expects that this will continue under the policies proposed by Trump; it may even get worse.Coupled with the possibility of the Federal Reserve’s further interest rate cuts and the unstable economic situation, you have a perfect macro environment that makes Bitcoin a “must-have” asset for investors.
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A growing real-life use case: To understand the application of cryptocurrencies in everyday life, just look at the huge success of Polymarket, a predictive market that accurately predicted the outcome of this election.You can also take a look at all areas from stablecoins to games to decentralized finance.Cryptocurrencies are rapidly becoming mainstream.
I can also add more: Wall Street’s acceptance of cryptocurrencies; rapid improvements in blockchain technology; companies and governments allocate funds to cryptocurrencies.Before the November 5 election results were announced, we were in a bull market; the election results will only accelerate this process.
Idea 3: Choice is important
Finally, I would like to remind everyone to be cautious.
Today, the cryptocurrency market is booming, with all assets rising.There is a general expectation of more support from the regulatory environment, which I think makes sense.This could mean more ETFs, more institutional adoption and more growth.
But it is worth remembering that not all crypto projects are good, and not all projects will succeed.All regulatory resets do is put encryption in a fair and equal playing field that can succeed or fail based on its own merits.Investors have a responsibility to screen out good things and take a rigorous approach to assessing risks.At Bitwise, we will continue to do our part.
As an industry, we will be passionate in the coming years.Congratulations to all investors who have taken the risk when cryptocurrencies are not yet popular.You are early adopters and see the possibility when others see only risks.We thank you for joining us on this journey.
