Bitwise's CIO Claims Bitcoin is Entering an IPO Phase – A Historical Insight for Increased Investment

Bitcoin recently dipped below $100,000 on Tuesday, following its peak above $126,000 in early October. Despite this volatility, Bitwise’s CIO, Matt Hougan, believes the cryptocurrency is currently undergoing an “IPO moment.” Historical trends suggest this phase is an ideal time for increased investment rather than hesitance.

Hougan elaborates that the traditional expectations of company growth don’t apply to Bitcoin anymore; it simply requires wider acceptance across the globe.

“Bitcoin’s Sideways Movement Shouldn’t Deter Investors”

Hougan indicates that the present pause in Bitcoin’s price action, although frustrating for some, is typical during a shift towards mainstream adoption. He highlights his reference to a recent insight from macro investor Jordi Visser, asserting that Bitcoin is in a transition reminiscent of notable tech companies during their public offerings.

He provides the example of Facebook, which traded flat or even depreciated for 15 months post-IPO, before significantly gaining in value.

The transitions the cryptocurrency is now experiencing reflect a similar maturation process, mainly defined by liquid institutional demand emerging along with product offerings like spot ETFs.

The narrative Hougan presents underscores that the constraints between Bitcoin’s current valuation and a potential much higher valuation mainly rely on its global acceptance. This context lends a positive light to today’s market fluctuations, framing them as opportunities rather than signs of weakness.

5% As a New Benchmark

Hougan argues that allocative strategies must evolve, suggesting that a minimum of 5% in Bitcoin should replace the outdated 1% benchmark for investors moving forward.

“The days of a 1% allocation to Bitcoin are over. Increasingly, investors need to be thinking of 5% as a starting point. Bitcoin is going through its IPO moment. If history is any guide, we should celebrate by buying more.”