- After breaching a record-high of $58,000 last Sunday, bitcoin slid to $47,000 on Friday.
- Despite regulatory uncertainty, three CEOs of money managers are still bullish.
- They explain why bitcoin is still in its early stages and set to mature into a gold-like market cap.
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Is bitcoin entering a
After the digital currency slid from its record high of $58,000 last Sunday to $47,000 as of Friday afternoon, its biggest weekly loss since a 33.5% decline last March, some skeptics are saying bitcoin is on the verge of falling into, if not already, in a bear market.
Unsurprisingly, bitcoin bulls see the decline as more of a healthy pullback or opportunity to buy the dip.
“We were trading below $20,000 at the start of December, and we rallied almost up to $60,000. Given the size of that move, it’s not surprising to see a pullback,” Matt Hougan, chief investment officer of the $1 billion Bitwise Asset Management, said in an email interview on Tuesday when bitcoin fell to as low as $45,580.
Hougan, whose firm manages a bitcoin fund, believes that the major driver of this bull market is still in place. Unlike previous bull markets driven by retail participation, this one is being propelled by corporations, hedge funds, financial advisors, and institutions moving bitcoin onto their balance sheets and into their portfolios for the first time.
“We are still in the early innings of that process,” he said. “Until it’s either complete or disrupted, the underlying thesis remains intact.”
Cathie Wood, CEO and CIO of the $60 billion Ark Invest, shares Hougan’s sentiment.
“When you think that the market cap or network value of bitcoin is roughly $900 billion to $950 billion. Think about that in the context of an Apple [stock], it’s less than half of Apple’s valuation,” Wood said, speaking on a panel during the Bloomberg Crypto Summit on Thursday.
“Here we’re talking about the reserve currency of the crypto asset world, the first global digital monetary system,” she added. “It’s a very big idea, and now we have institutions embracing this idea.”
Bitcoin’s market cap surpassed $1 trillion for the first time just a week ago before falling back to around $850 billion as of Friday afternoon.
Wood, whose firm holds more than seven million shares in the Grayscale Bitcoin Trust, believes that the digital token still has “trillions of dollars of market cap potential.”
But for more investors to buy in and naysayers to change their minds, bitcoin has to first pass intensified…