Trump’s Bitcoin Bombshell: A Financial Drama Worthy of Austen

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Mr. Matt Hougan, the esteemed Chief Investment Officer at Bitwise, has declared that President Donald Trump’s executive order might very well disrupt the predictable rhythm of Bitcoin’s four-year cycle. 🎭

While Mr. Hougan conceded that the market has yet to entirely escape the clutches of this cycle, he ventured to predict that any forthcoming downturns would be both briefer and less severe than those of yesteryears. A most comforting thought, indeed! 😌

The Executive Order: A Catalyst for Change?

In his most recent weekly missive, Mr. Hougan drew attention to the President’s executive order, alongside the Securities and Exchange Commission’s (SEC) recent pro-crypto inclinations, as pivotal forces propelling Bitcoin into the mainstream. 🚀

On the 23rd of January, President Trump affixed his signature to an official decree, thereby establishing a “national digital asset stockpile.” The result? A veritable flood of crypto inflows, amounting to a staggering $1.9 billion. 💰

“It created a pathway for the largest Wall Street banks and investors to move aggressively into the space,” Mr. Hougan penned with evident satisfaction.

According to Mr. Hougan, the current crypto cycle commenced in March 2023, coinciding with Grayscale’s notable triumph in its legal skirmish with the SEC over a Bitcoin ETF. 🏛️

The ETFs made their grand debut in January 2024, ushering in hundreds of billions of dollars from eager new investors. Yet, Mr. Hougan perceives the executive order as the harbinger of an even more profound transformation. 🌍

“But the full mainstreaming of crypto—the one contemplated by Trump’s executive order, where banks custody crypto alongside other assets, stablecoins are integrated broadly into the global payments ecosystem, and the largest institutions establish positions in crypto—I’m convinced will bring trillions,” the note proclaimed with unbridled optimism.

It is worth noting that Bitcoin’s four-year cycle is a pattern dictated by halving events. The price typically endures a bearish accumulation phase, followed by a bull market spurred by reduced supply, and then a bear market post-peak. This cycle repeats approximately every four years as the block reward for miners is halved. 🔄

BTC has weathered downturns in 2014, 2018, and 2022. Should this pattern persist, the next pullback might well occur in 2026. Despite this, Mr. Hougan remains sanguine about crypto’s long-term prospects. 🌟

“The crypto space has matured; there’s a greater variety of buyers and more value-oriented investors than ever before. I expect volatility, but I’m not sure I’d bet against crypto in 2026,” Mr. Hougan acknowledged with a hint of defiance. 🎲

He also ventured to predict that 2025 would be a particularly auspicious year for crypto. 🌈

“We’re on the record predicting that bitcoin’s price will double this year to above $200,000, driven by flows into ETFs and bitcoin purchases by corporations and governments,” the CIO declared with a flourish. 📈

However, Mr. Hougan added, with a touch of modesty, that this forecast might indeed be conservative. Lastly, he pointed out that the ramifications of Trump’s executive order and broader regulatory shifts would unfold over years rather than months. ⏳

According to Mr. Hougan, the establishment of a new crypto regulatory framework will require at least a year. Moreover, Wall Street firms may necessitate even more time to adapt. 🏦

In the interim, the CIO opined that leverage will accumulate, excesses will manifest, and unsavory characters will emerge, potentially precipitating a sharp pullback. 📉

Nonetheless, Mr. Hougan remains convinced that any correction is likely to be “shorter” and “shallower,” owing to the crypto market’s maturation and a more diverse, value-driven investor base. 🌱

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2025-01-30 11:14