Bitwise CIO Matt Hougan sees a significant opportunity in the disconnect between retail and institutional sentiments toward crypto.
In a recent letter to investors, Hougan painted a bullish picture for the crypto sector, emphasizing that while retail investors remain skeptical, institutional capital continues to flow into the market at record pace.
The introduction of Bitcoin (BTC) exchange-traded funds (ETFs) has dramatically shifted the investment landscape, with significant allocations coming from professional investors.
Furthermore, regulatory sentiment has taken a surprising turn, with Washington transitioning from a perceived adversary of crypto to a potential ally.
Hougan noted:
“From a risk-adjusted perspective, it is arguably the best time in history to invest in crypto.”
Retail gloomy amid alt season absence
While institutions appear to be doubling down, retail investors are increasingly despondent. Hougan cited Bitwise’s proprietary crypto sentiment score, which incorporates on-chain data, flows, and derivative analytics, indicating that retail sentiment is at one of its lowest levels ever recorded.
A major factor contributing to this gloom is the underperformance of altcoins, which have significantly lagged behind Bitcoin’s rally. While Bitcoin has surged 95% over the past year, Ethereum (ETH) has posted a meager 2% gain, while most other altcoins have struggled in a sea of red.
Hougan said:
“Retail investors love to speculate on altcoins, and the lack of an ‘altcoin season’ has them depressed.”
Institutional conviction
Hougan believes that institutional investors have the correct view of the market, considering Bitcoin’s extremely favorable supply-demand conditions.
ETFs and corporations have absorbed nearl
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Author: Gino Matos
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