Crypto Investors Adopt Stock-Picking Strategy for Asset Selection, Says Bitwise CEO
The crypto market has evolved significantly, attracting both Wall Street and Main Street, marked by the introduction of exchange-traded funds (ETFs) and even sovereign adoption.
- Market capitalization remains a key metric for assessing cryptocurrencies, but institutions are shifting towards more sophisticated analysis methods.
- Hunter Horsley, CEO of Bitwise Investments, notes that institutions now recognize the crypto space's diversity, resembling the stock market with unique projects.
- A stock-picking strategy involves selecting individual assets based on fundamentals, rather than relying solely on market cap.
- Bitwise filed an S-1 with the SEC to launch a spot ETF focused on Avalanche’s AVAX token.
Beyond Bitcoin
- Institutions traditionally focused on [Bitcoin](https://holder.io/coins/btc/) as digital gold but are now exploring alternatives like [Ethereum](https://holder.io/coins/eth/) and [Solana](https://holder.io/coins/sol/).
- New ETFs targeting alternative assets, including meme coins like DOGE, are being launched.
Shift in Strategy
- Current macroeconomic conditions favor crypto assets with strong fundamentals, akin to stock picking.
- Interest rates and inflation have changed since the "everything rally" of 2020, affecting asset strategies.
Is Bitcoin Still a Store of Value?
- The debate continues on whether Bitcoin serves better as a store of value or a payment network.
- On-chain activity has slowed, impacting miners reliant on transaction fees.
- Horsley believes Bitcoin can serve both roles, but not simultaneously.
A Different Cycle
- The four-year Bitcoin cycle often triggers bear markets following halving events.
- Potential bear market catalysts are fewer due to market maturation and diversification.
- Volatility may be milder compared to past cycles, showing Wall Street-like dynamics.