Matt Hougan, chief investment officer at Bitwise, said that recent commitments by U.S. politicians have forced him to reconsider his perspective on bitcoin’s potential. In a July 31 blog post, Hougan wrote that “we’re not optimistic enough” after recent pledges by influential U.S. politicians at a bitcoin conference in Nashville.
Politicians pledge to create bitcoin reserve
The most important of these commitments was Republican candidate Donald Trump ‘s proposal to create a strategic national bitcoin reserve. Wyoming Senator Cynthia Lummim also unveiled a bitcoin reserve bill aimed at addressing the country’s staggering $35 trillion debt crisis.
In addition, independent candidate Robert F. Kennedy Jr. has pledged to require the Treasury to purchase 500 bitcoin per day until at least 4 million bitcoins have been accumulated.
“Just a year ago, these ideas would have seemed like mere fantasies. However, given recent events, they seem increasingly likely,” Hougan said.
He highlighted the transformation from the time of the FTX bankruptcy, Bitcoin was valued at $17,000, and skeptics scolded the cryptocurrency world, to the current scenario in which politicians are openly discussing plans similar to the establishment of a “Bitcoin Knox Fort.”
Hougan highlighted the evolving landscape. He pointed to the U.S. Department of Justice’s recent cooperation with Coinbase, a move that followed a lawsuit by the U.S. securities regulator against the platform for allegedly operating as an unregistered securities exchange.
While Hougan acknowledged that some politicians may not support Bitcoin, but rather benefit from its growing popularity, he suggested that politicians’ positioning on the spectrum may be irrelevant. “Politicians are embracing cryptocurrencies because Americans are embracing cryptocurrencies,” he said.
At the Bitcoin 2024 conference, Michael Saylor, the visionary behind MicroStrategy’s Bitcoin investment strategy, predicted that Bitcoin will grow to $13 million by 2045. His more optimistic forecast, a “bull case,” set the target price even higher, at $49 million.
This amount closely matches a recent forecast by crypto asset manager VanEck, which predicted that Bitcoin could reach $52 million by 2050.
Despite the optimism, Bitcoin has seen a decline of more than 8% since nearly reaching $70,000 on July 29 and remains 13.4% below its all-time record of $73,737 set on March 14, according to data from CoinGecko.
Digital asset products continue streak of inflows
The digital asset investment landscape continues to attract strong interest, with inflows maintaining a positive trajectory for the fourth week in a row. The sector saw inflows of $245 million last week, with year-to-date (YTD) inflows reaching a record $20.5 billion.
Bitcoin products continue to attract significant investment. Last week alone, Bitcoin recorded inflows of $519 million, bringing its month-to-date inflows to $3.6 billion, and year-to-date inflows to an unprecedented $19 billion.
The increase in investment is believed to be due to the political climate in the United States, particularly comments from the election campaign suggesting that bitcoin may be considered a strategic reserve asset.
In addition, the expectation of a potential rate cut by the Federal Reserve in September 2024 has strengthened investor attitudes toward Bitcoin.
