Why NOW is the Best Time to Buy Bitcoin | Bitwise CIO Explains

Despite the uncertain macroeconomic situation, bitwise CIO Matt Hugan believes this is the best time ever to buy Bitcoin on a risk adjusted basis.

You're going to see states or the government step in, lower interest rates, print money, and that's going to send Bitcoin straight up.

In this interview, Matt shares his outlook on the Bitcoin market, both short and long term, as well as the key use cases that could boost the price of certain altcoins.

Ask yourself, if there are 2 billion people using stablecoins, what's the price of ETH and Sol?

As always, this is educational content, not financial advice. I'm Giovanni. Let's dive in. Matt, it's always a pleasure to have you on our show.

Thanks for having me again.

You said that. Right now it's the best time ever for buying Bitcoin on a risk adjustment base. From a risk adjustment perspective, can you tell us what you meant by that and why you think so?

Yeah, absolutely. You know, you have to look at every investment from both the reward and from the risk perspective. And if we go back to the very earliest days of Bitcoin, let's say when it was trading for a dollar, obviously you had a huge amount of potential reward, but you also had a huge amount of risk. You had technology risk because Bitcoin was brand new. You had trading risk because there weren't good places to trade. You had custody risk, you had regulatory risk, reputational risk, government risk, risk that the government, US Government could come out and ban Bitcoin. You were taking on all those risks. And when I look at Bitcoin today, I think all of those risks have been removed. We now have ETFs which make it push button, easy to buy crypto with the best custodians and best traders in the world. The technology has run almost perfectly for 15 years. It's very stable and secure. You now have adoption by institutional investors and now the US Government has even created a US strategic Bitcoin reserve, removing from my perspective, the last existential risk that the government might step in and ban this asset. So I think the risks have been largely removed and yet you still have really significant upside. And yet bitcoin is only 10% of gold. So just to match gold, which I think is just a stopping point on its long term journey, it has to 10x from here. So as I look at it from a risk adjusted perspective, you have significantly de risked Bitcoin at the same time that you still have significant upside. And so I think it's the best time in history to buy bitcoin.

Actually, I was listening to another interview you were doing with some other podcasts and you were saying that you, you are seeing crypto decoupling from high beta stocks. But here we are now with the stock market going down because of this macroeconomic situation, Trump's tariffs and so on, and crypto going down harder, bitcoin going down harder as it has always been. Why do you think this time will be different?

Yeah, it depends on your time frame. So I think from a short term timeframe perspective, crypto behaves like a risk asset. We've seen that historically. If you look over the last 10 years, on days where the S&P 500 is down 2%, crypto is on average down 2.6%. So not only not hedging the pullback in bitcoin on the day you get this pullback, but actually doing worse. And we're seeing a little bit of that right now with the uncertainty around tariffs. Although I would note that bitcoin hasn't gone back down to its previous all time high of 72,000 and it's still hovering, I would say, within the pull of that a hundred thousand dollars range. So I think it's doing okay long term. The reason I think we're going to see really significant decoupling in the year ahead is you have to think of crypto as being driven by two factors, speculation, which is that risk on, risk off, sentiment, and then fundamentals, which is what's happening underneath the surface to bitcoin. And from my perspective, the fundamentals are just so overwhelmingly strong that it's going to overcome whatever sort of macro hurdles we have. At a fundamental level, bitcoin is producing 165,000 bitcoin per year. That's the total net new production. And ETFs are buying half a million a year. Last year, corporations bought 250,000. I think governments are going to be buying significantly. And so I just think the fundamentals are too strong to be held back over the long term by this macro uncertainty. So what we have now, from my perspective, is a short term buying opportunity. We're seeing the market react to the tariffs. But bitcoin isn't about tariffs. If anything, tariffs are good long term for Bitcoin because it increases increases government interference with money.

We are bullish on bitcoin on the long term, but when it comes to this year, we see that the macroeconomic situation looks quite worrying. There are concerns about recessions that are growing. For example, Goldman, I think released the report. So when it comes to 2025, do you think there is still, still a reason to be bullish, or you think we need to wait for, for the, the longer run?

No, I, I'm still bullish for 2025. I think the price is going to end 2025 closer to 200,000 than to 100,000 and certainly higher than we are today. I don't buy the tough talk from governments that they're going to let us fall into recession and go through a period of deep structural adjustment. I think governments always end up pushing the easy button. Even deficit conscious governments end up pushing the easy button of cheaper monetary policy, lower interest rates, more aggressive quantitative easing. And I suspect if we do in fact encounter the sort of economic volatility that people are predicting, you're going to see states or the government step in, lower interest rates, print money, and that's going to send Bitcoin straight up.

I was listening to a few of other interviews with you where you were sharing some encouraging data when it comes to the potential of Bitcoin in the, in the long term. Can you maybe share some of those most encouraging points of data to give some, give some positivity and optimism to our audience?

Yeah, absolutely. If you look at institutional investors, they control, you know, let's call it $30 trillion in wealth, just US wealth managers, just one segment of the institutional market. I think they have to get to, you know, 2, 3% allocations to Bitcoin. That's buying hundreds of thousands of dollars of Bitcoin. There's just too much structural long term demand that has to come into this market against a severely limited new supply. And that means that existing holders have to sell. And some are willing to sell here at 82,000, some were willing to sell at 100,000. But I think the price is going to have to ratchet up significantly if this demand materializes in the way I suspect it will. And everything I do at Bitwise, from meeting with clients every week to speaking at conferences, suggests that that institutional demand will be there.

You were mentioning the fact that despite all this growing acceptance and institutionalization of crypto and Bitcoin, specifically Bitcoin, still less than a half of the wealth managers in the US are allowed to recommend Bitcoin to their clients. Can you explain why that is and whether you see that behavior changing anytime soon?

Yeah, it's a great question. You know, most of the wealth management in the US breaks down into a couple different buckets. You have independent RIAs, registered investment advisors that are individuals that can do whatever you want. And then you have many wealth advisors who work for firms like Morgan Stanley or Wells Fargo or ubs. These large national account platforms, and they have restrictions on what ETFs and what products they let those advisors buy. ETFs have to be approved by the SEC, and then they have to be approved by those platforms before they'll allow advisors to buy them. And where we are in the bitcoin ETF journey is most of those platforms haven't turned on yet. So it's still the case today that most of the major wirehouse platforms in the US Restrict their advisors from recommending Bitcoin to clients. That's going to change. I feel very competent over the next three months, I think you're going to start to see those spigots turn on. And that's part of the reason I'm so bullish on the demand question. Right. We go back to last year. Again, we saw ETFs buy half a million Bitcoin with half of the market literally restricted from doing anything. And that will change this year. And we're going to see yet more inflows.

And if you had to point out the most common criticism or argument that is used still against the case of purchasing Bitcoin from institutions, what would that point of concern still is and how you would debunk that?

Yeah, you know, for the last. We do a survey of these advisors every year, these wealth managers every year. We've done it for seven years. And we ask them what prevents them. And the number one thing historically has been a lack of regulatory clarity. And the number two thing has been a lack of an etf. And those have been removed. Right. We now have an etf. I would argue that we have regulatory clarity around Bitcoin. And I think the concerns about those are going down. I think what people are focused on now are questions like, how do you value bitcoin, Am I too late? And is it too volatile for your portfolio? I would answer those two questions pretty simply. Bitcoin itself is very volatile, making a mistake about it. But when you add it to a portfolio at the amounts these advisors do, which is typically 1 or 2 or 3%, and you rebalance that portfolio, what history shows is it doesn't increase your portfolio volatility overall. I like to make the analogy to hot sauce. If I drank a bottle of hot sauce, that would be uncomfortable. But if I'm having a burrito or some tacos and I put a little hot sauce on, it makes it taste better. And I Think crypto is like that in a wealth advisor's portfolio. It's volatile itself, but it doesn't make the portfolio volatile if you use it in the right amounts. And then on the valuation perspective we'll get into it. But I think we're still very early in this journey. It's still the case that most financial advisors, most institutional investors, own zero bitcoin. Until that's not true, we're by definition early and there's huge upside ahead. And I think that's the case right now.

So we see that there is a higher and higher expectations for stablecoin legislation coming into force in the US soon. And we see from statements from officials, they plan to use us a deep back stablecoin to preserve the dominance of the of the US dollar around the world. How such a legislation will impact the product crypto market.

Yeah, absolutely. So the I do think we'll get stablecoin legislation and I do think the US wants to use stablecoins to export $ demand around the world and bring more money into the treasury and I think they'll be successful. There are billions of people around the world that would rather save their money in the in stable coins than in their local currency. There are billions of companies or businesses or individuals around the world that would rather transact on a financial rail that cost a penny than on their existing financial rails which could be slow and very expensive. So I think if we get this legislation, we're going to bring billions of people eventually into the stablecoin market. And the reason that matters for crypto investors is that once you're using stablecoins you're just one small step away from using Uniswap or away from using AAVE or other defi apps or purchasing Bitcoin. You already have downloaded a wallet, you're comfortable with digital assets and you're sort of proximate to the crypto ecosystem. Whereas right now those billions of people are not proximate to the crypto ecosystem. They're not one step away from using a Defi app. They're a massive onboarding away before they even can think about using a Defi app. So if you ask yourself, if you just keep it very simple, ask yourself if there are 2 billion people using stablecoins, what's the price of ETH and Sol? I think when you ask yourself those sorts of questions, the price of Ethereum and Solana is obviously higher. If we have 2 billion people, people with stablecoin wallets, comfortable with digital assets and you know, that's the kind of investment that I like to make. Very simple questions on very long term time horizons with very obvious answers that I have high conviction in. And I think this is one of them.

You expect bitcoin to cross the million dollar benchmark by 2029, if I remember correctly. Can you tell us how we get there?

Absolutely. I think we're taking all the steps. So I think we elected a pro crypto administration in the US We've established a bitcoin strategic reserve. I think you're going to see governments around the world buying bitcoin. I think you're going to see institutions buying bitcoin and corporations buying bitcoin. And if bitcoin becomes an asset that's held by governments, by corporations, by institutions, I see no reason why it won't meet people. Parity with gold within the next four years. I sort of think we're in this new four year, multi year cycle of government and institutional adoption. And I think the end point of that is parity with gold. And that's a million dollars of bitcoin. If we don't see these, these entities come into the market, then we won't get there. But I really think we will. And, and then it will be interesting to see where bitcoin goes from there. But let's at least get to parody and then we'll start working on the hard yards.

Awesome. Matt. I think that was it. It was a super interesting conversation. Thanks a lot for coming on our show.

Thanks for having me. I really enjoyed it. Sh.