Bitwise CIO Assesses Impact of Record Liquidations on Crypto Market’s Long-Term Trend

Bitwise CIO says recent crypto crash won't affect long-term bullish trend.

The recent crypto market crash will not affect the long-term bullish trend, according to Matt Hougan, Chief Investment Officer at Bitwise, in his analysis.

He stated that the decline was triggered by cascading liquidations rather than fundamental issues.

The sharp movement began following Donald Trump’s announcement of a potential 100% tariff on Chinese goods. Traders reacted by selling off in the crypto market as stock exchanges were closed.

Bitcoin’s price fell by 15%, and some altcoins, like Solana, temporarily dropped by about 40%. The decline led to automatic liquidations of leveraged trader positions, further driving down prices. The total liquidation amount approached $20 billion. However, the market quickly rebounded.

Hougan believes the event had no serious consequences. He identified three key factors for assessing the situation:

1. Collapse of major players. According to Bitwise, the main losses were borne by retail investors. Large funds and market makers were unaffected.
2. Technology performance. Blockchains withstood the stress test. DeFi platforms like Uniswap and Aave operated without issues; some centralized exchanges experienced problems.
3. Investor reaction. Hougan noted the absence of panic among professional investors. He emphasized that he did not receive a large number of messages from clients, unlike journalists.

According to Hougan, fundamental growth drivers—regulation, institutional capital inflow, and technology adoption—remain intact. He expects the bullish market to continue after a brief period of volatility.

Earlier, trader Peter Brandt stated that Bitcoin’s price will exceed $125,000 after another decline.

Head of Research at K33, Vetle Lunde, views the drop in digital gold’s price as a good market entry opportunity.