Bitwise's Explanation of Bitcoin: The Bull Market Will Continue

Recent fluctuations have caught the attention of cryptocurrency investors. Bitcoin, Ethereum, and Solana, experienced sharp declines after former U.S. President Donald Trump threatened a 100% tariff on Chinese imports. However, Bitwise Innovation Director Matt Hougan stated that these fluctuations are short-term and the long-term upward trend will continue.

Last Friday, Trump announced that he would impose a 100% tariff on all Chinese imports in response to China's threat to restrict the export of rare elements, causing Bitcoin to drop by 15%, Ethereum by 20%, and Solana by 40%. However, immediately after this, by Monday morning, Bitcoin had recovered back to the $115,000 level.

In a note sent to investors, Hougan stated, “No fundamental factors changed during this decline; neither technology, security, nor the regulatory outlook.” He emphasized that major institutions were not adversely affected during this process, noting that losses were limited only to individual traders. "Firms did experience losses, but all remained standing. This resilience has accelerated recovery,” he said.

Hougan noted that the incident was also a significant test from a technological perspective. He pointed out that decentralized platforms such as Uniswap, Aave, and Hyperliquid operated smoothly. Additionally, he highlighted that despite Binance creating a $283 million user refund and a $400 million rescue fund, the overall system successfully passed the test.

However, he observed that this time, messages that would be interpreted as panic signals did not emerge regarding investor psychology. “Media interest was intense, but professional investors remained calm. This indicates that long-term confidence in the market has been preserved,” he remarked on how investors might assess the current situation.

Hougan indicated that short-term fluctuations in the market might continue, but he believes that driving forces such as institutional adoption, regulatory progress, and the transformation of traditional finance will sustain the bull market. “Crypto will take a breather for a while and then return to its fundamental dynamics. At that point, the bull market will continue from where it left off,” he evaluated.