Bitwise Asset Management’s Chief Investment Officer, Matt Hougan, recently defended Bitcoin (BTC) amidst ongoing criticisms, stating that dismissing the asset as a failed store of value overlooks its current stage of volatility, which he describes as a natural part of any emerging monetary asset’s development.

Hougan’s comments come in response to narratives triggered by Bitcoin’s approximately 50% drop from its historical peak and discussions questioning its viability as a payment method or a hedge against inflation.

Bitcoin’s Volatility Meets Institutional Impatience

The debate resurfaced following a Bloomberg report labeling the current market conditions as an ’existential’ crisis for Bitcoin, questioning its purpose if it continues to falter as a digital savings vehicle. In this piece, former Merrill Lynch trader Tom Essaye remarked, “Bitcoin is not replacing gold; it’s not digital gold,” negating its use as a hedge against economic instability.

In response, Hougan countered that Bitcoin’s journey cannot be expected to transition from ‘100% speculation’ to ‘0% speculation’ without going through various stages along the way. He projected that by 2050, Bitcoin could be owned by central banks, indicating maturation.

“You cannot travel from 100% speculation to 0% speculation without ticking every gradient in between,” Hougan stated. “The reason it doesn’t fit any individual box right now is it’s in the uncomfortable middle. But that’s a necessary part of the journey.”

His remarks come at a time when investor confidence is wavering, especially as Bitcoin’s price fluctuates significantly, recently plummeting after a new “temporary global tariff” announcement by U.S. President Donald Trump. Concurrently, searches for “Bitcoin is dead” have surged, signaling trader concerns similar to those witnessed during notable market collapses.

A Historical Precedent for Price Swings

Hougan’s argument draws parallels to historical events such as gold’s volatility after the U.S. abandoned the gold standard in 1971. He pointed out that just as gold experienced dramatic price movements in its early days, Bitcoin too is progressing through a similar phase that could establish its value in the future.

“Either you believe it’s literally impossible to create a digital store of value, or you have to imagine it passing through exactly this teenage state,” emphasized the Bitwise CIO.

His viewpoint suggests that the current downturn reflects the maturation of Bitcoin as an asset class rather than its potential failure.