Bitwise’s Matt Hougan says that the recent crypto market correction is reminiscent of March 2020 – a big opportunity for bulls.
Hougan says on the social media platform X that the Covid-induced crash of March 2020 “supercharged” the reasons for Bitcoin’s long-term rise, while its short-term price was decimated.
“It showed us that central banks would bail out the economy at the first sign of trouble. It demonstrated the limitations of centralized institutions. And it reminded us that the future is digital.
The changes all pointed in favor of Bitcoin becoming more important, not less. In the long term, that’s exactly what happened.
I see the same setup today.”
Hougan says that rough macro developments, including the sudden rate hikes by the Bank of Japan and the increased tensions in Israel, along with heavy selling from crypto firm Jump, created a perfect storm for a big pullback in markets.
However, despite Bitcoin (BTC) falling below the $50,000 mark and the brutal correction in altcoins, Hougan says the current conditions are “straight out of the Covid playbook.”
The CIO says a new wave of looser monetary policy is now inevitable, something that has historically ignited crypto markets.
“Over the past few days, the odds of a 50bps rate cut from the Federal Reserve in September have gone from 11% to 98%. Some are even calling for an “emergency cut” before the September meeting.
In other words, the printer cometh. We shouldn’t be surprised. It happened during Covid. It happened after the eurozone crisis in 2010. And it happened in 2008…
Historically, when we’ve seen this kind of global economic panic, crypto has traded down initially but ended much higher a year later.
Maybe this time really is different, but I wouldn’t bet on it. In fact, I’m betting the other way.”
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