 ▲ Bitcoin (BTC) bull market |
As Bitcoin (BTC) enters a bottoming phase after the Fear and Greed Index hit an all-time low, substantial inflows from institutional investors are expected to form a massive wave that could continue for years.
Matt Hougan, Chief Investment Officer (CIO) of Bitwise, said in an interview on February 9 (local time) with Miles Deutscher, host of the crypto-focused YouTube channel Miles Deutscher Finance, that the recent sharp drop in Bitcoin was the result of fears surrounding the four-year cycle theory combined with macroeconomic uncertainty. Citing the Fear and Greed Index falling to its lowest level ever of 5 since its inception, Hougan stated that “numbers like these can create points of asymmetric return opportunities in the market.” Despite short-term volatility, Bitcoin is solidifying its position as a store of value.
Hougan defined Bitcoin as digital gold superior to physical gold, highlighting self-custody and settlement convenience as its core competitive advantages. He reminded that after the launch of the first gold spot ETF in 2004, it took about eight years for inflows to reach their peak. Similarly, Bitcoin is still in the early stages of institutional adoption, and significant education and time will be required before capital from major asset managers and insurance companies is fully reflected in actual portfolios.
Regarding the pace of institutional entry, Hougan pointed to the conservative decision-making structures of traditional finance. Presenting data showing that institutions take an average of eight meetings and around two years to decide on Bitcoin allocations, he explained that “about 95% of institutional investors are only just beginning to review Bitcoin.” This suggests that inflows through Bitcoin spot ETFs will not be a temporary phenomenon but a long-term driver lasting for years.
Hougan also mentioned the explosive growth potential from the combination of real-world asset (RWA) tokenization and decentralized finance (DeFi). He forecast that if all financial assets are tokenized on blockchains, demand to borrow and manage capital using those assets as collateral would increase astronomically. He added that “if base networks such as Ethereum (ETH) or Solana (SOL) grow tenfold, DeFi projects built on them could see opportunities for more than 100x growth.”
The emergence of artificial intelligence (AI) agents was identified as a powerful catalyst that could expand transaction volumes in the crypto market by thousands of times. Hougan noted that an era is approaching in which AI agents, rather than humans, will trade and settle 24/7 using stablecoins. Because AI agents cannot easily open traditional bank accounts but can instantly create and use crypto wallets, they are expected to become major practical users of the crypto ecosystem.
*Disclaimer: This article is for investment reference only, and no responsibility is taken for any investment losses based on it. The content should be interpreted solely for informational purposes.*