Cryptocurrency asset management company Bitwise’s Chief Investment Officer, Matt Hougan, shared his personal views on the current cryptocurrency market on X last night.
Matt Hougan believes that, looking at the history of Bitcoin, various factors have led to an “early pulling of future market demand for Bitcoin,” putting it in a “lockbox.” The biggest culprit in this is the GBTC issued by Grayscale Asset Management.
Hougan pointed out that, before the formal transformation of GBTC into an ETF, hedge funds used it to profit from the premium, pulling hundreds of billions of dollars of future demand ahead. Other factors, including the bankruptcy of Mt. Gox and the seizure of assets from the Silk Road, have also locked Bitcoin in a “lockbox.” Hougan explained:
These lockboxes have kept the price of Bitcoin at a higher level than in a free-flowing market, which is good. But now, with the launch of ETFs and the passage of time, we are unlocking these assets. As a result, Bitcoin must attract hundreds of billions of dollars in new demand to maintain the status quo. Bloomberg analyst Eric Balchunas previously stated that Mt. Gox currently holds 141,686 BTC, worth over $9.26 billion, which is equivalent to more than half of the inflow of Bitcoin ETFs being offset.
Hougan believes that the market has already absorbed most of the unresolved assets. For example, the outflow of funds from GBTC has stabilized. However, many factors have not yet been fully digested, which is affecting today’s market. However, Hougan also added: