Bitwise Advises Against Solely Betting on Bitcoin

While the premier cryptocurrency will retain its status as digital gold, investors should also consider other assets, according to Bitwise’s Chief Investment Officer Matt Hougan. He believes that diversification is key.

He highlighted that Ethereum’s price surged by 37% in a week due to the Pectra upgrade and a general interest in risk assets. This has reignited discussions on the merits of diversifying crypto portfolios.

The Crypto Market and Internet Giants

Hougan compared the current situation to the internet market of 2004, where Google’s dominance did not prevent Amazon and Netflix from delivering substantial returns.

“Bitcoin is the king of the crypto market: it leads in capitalization and liquidity. But blockchain, like the internet, is a universal technology. Beyond money, it enables the creation of decentralized applications, asset tokenization, and the transformation of business models,” the expert stated.

Reflecting on 2004, the Bitwise CIO notes that the blockchain ecosystem is following a similar path: the first cryptocurrency focuses on the monetary function, while Ethereum and Solana are advancing DeFi and tokenization.

“By 2030, it is uncertain which asset will show the best performance. But if one believes that blockchain will transform all sectors, diversification is logical,” Hougan emphasized.

“Investing in the Bigger Picture”

He clarified that for investors who view cryptocurrency solely as an inflation hedge, Bitcoin suffices. Others should spread their capital across multiple assets rather than trying to predict future leaders.

“Actively managed funds lose to indices 97% of the time. In the crypto industry, this is especially relevant — it’s better to invest in the bigger picture rather than search for winners,” the expert concluded.

Back on May 5, Hougan stated that the digital asset market could face challenges this summer if the US Congress does not continue working on relevant legislation.