Bitcoin may start to lose its reputation as a volatile asset.
According to Matt Hogan of Bitwise Asset Management, the wild price volatility of cryptocurrencies has decreased significantly over the past decade.
“What’s driving the Bitcoin market right now is a simple supply and demand imbalance,” the company’s chief investment officer told CNBC’s “ETF Edge” on Monday. “There is a huge new source of demand from these ETFs, and the supply is inelastic.”
On January 11th, the first Bitcoin exchange-traded fund began trading. Since then, the asset has risen more than 50%. Bitcoin hit an all-time high of just under $74,000 this week.
But Hogan admits that’s not the case for everyone.
“It moves around a lot. Some people find it difficult to understand,” Hogan said.
While Bitwise is betting on Bitcoin growth, ProShares owns an ETF looking to profit from losses with the Short Bitcoin Strategy ETF. It is down 42% so far this year and has plunged nearly 70% over the past year.
“In the words of Mark Twain, ‘reports of our deaths are greatly exaggerated,'” ProShares’ Simeon Hyman told CNBC. “We are happy to be here and think we are serving as an important alternative.”
Hyman, the firm’s global investment strategist, points out that Bitcoin’s historical strength has been around for much longer than the launch of the Spot Bitcoin ETF.
“This month is the anniversary of the collapse of crypto-related financial institutions. Last year, Bitcoin was still rising at that time,” Heiman said. “I think long-term investors are starting to come in for asset allocation and diversification purposes.”
Hyman’s ProShares also operates a long Bitcoin ETF, the ProShares Bitcoin Strategy ETF. It’s up 55% since January 1st and 111% over the past year.
As of Friday night, Bitcoin is up 180% in the past 12 months.
