Why Bitcoin’s reputation as a volatile asset may be fading

Bitcoin is showing signs of becoming less volatile as an asset, according to Matt Hougan from Bitwise Asset Management. He notes that the cryptocurrency’s price fluctuations have decreased significantly in the past decade.

Hougan explains that the current bitcoin market is driven by a demand-supply imbalance, with a surge in demand from ETFs and limited supply. Since the introduction of the first bitcoin exchange-traded funds on Jan. 11, the asset has increased by more than 50% and reached an all-time high of nearly $74,000.

Despite bitcoin’s growth, Hougan acknowledges that it may not be suitable for everyone due to its volatile nature. While Bitwise is optimistic about bitcoin’s future, ProShares offers an ETF that aims to profit from bitcoin losses, called the Short Bitcoin Strategy ETF.

Simeon Hyman from ProShares emphasizes that reports of bitcoin’s demise are exaggerated, as the cryptocurrency has shown historic strength long before the introduction of spot bitcoin ETFs. ProShares also runs a long-bitcoin ETF, the ProShares Bitcoin Strategy ETF, which has seen significant gains in recent months.

Overall, bitcoin has experienced a 180% increase in value over the past year, indicating its continued growth and potential for long-term investors seeking asset allocation and diversification.

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