Bitcoin may begin to lose its reputation as a volatile asset.
According to Bitwise Asset Management’s Matt Hougan, the cryptocurrency’s wild prices have come down quite a bit over the past decade.
“What’s driving the bitcoin market right now is a simple supply-demand imbalance,” the firm’s chief investment officer told CNBC’s “ETF Edge” on Monday. “We have this huge new source of demand for these ETFs, and we have a supply that is inelastic.”
On January 11, the first bitcoin exchange-traded funds began trading. Since then, the asset has increased more than 50%. Bitcoin hit an all-time high this week of just under $74,000.
However, Hougan acknowledges that it may not be for everyone.
“It moves a lot. It’s hard for some people to understand,” Hougan said.
While Bitwise is betting on the growth of bitcoin, ProShares has an ETF looking to profit from losses with its Short Bitcoin Strategy ETF. It is down 42% so far this year and has fallen nearly 70% over the past year.
“To quote Mark Twain, ‘The reports of our death have been greatly exaggerated,'” Simeon Hyman of ProShares told CNBC. “We’re happy to be here, and we think we serve as a key alternative.”
Hyman, the firm’s global investment strategist, notes that bitcoin’s historical strength has lasted much longer than the launch of the spot bitcoin ETFs.
“This is the month of the anniversary of the collapse of crypto-linked financial institutions. Last year, bitcoin also rose then,” Hyman said. “I think it’s longer-term people who are starting to come for asset allocation and diversification.”
Hyman’s ProShares also operates a long-known ETF: ProShares Bitcoin Strategy ETF. It’s up 55% since January 1 and has gained 111% in the past year.
As of Friday evening, bitcoin was up 180% over the past 12 months.
(tagsTo Translate)ProShares Bitcoin Strategy ETF