This week has been rather quiet after last week’s excitement over a court decision involving the cryptocurrency XRP in the digital asset sector.
With over $1 billion in assets under management and an emphasis on cryptocurrencies, Bitwise Asset Management’s chief executive, Hunter Horsley, was asked what he anticipated for the sector over the coming few years.
Further rally ahead?
According to Horsley, there will likely be a bull market in cryptocurrencies for at least two years.
According to Horsley, the development of crypto might be divided into a number of four-year cycles. According to him, historically, the price of bitcoin and other cryptocurrencies rises for three years before falling, typically by 60% to 70%.
Every bull market had a unique catalyst, according to Horsley. A bull market in cryptocurrencies began in 2009 with the invention of bitcoin and continued through 2013. The launch of ether in 2015 also started a bull market that lasted until 2018. From 2019 to 2021, several blockchain applications increased the value of cryptocurrencies, said Horsley.
Bitcoin and ether both experienced a 60%+ decrease in value in 2022 as a result of the Federal Reserve’s prolonged increase in interest rates.
According to Horsley, there is a setup for cryptocurrencies to rise higher this year as it is the first year of a new four-year cycle. Given the market’s history, the next two to three years will see a bull market for cryptocurrency, he said.
Bitcoin has increased by over 80% this year to almost $30,000, however, according to data, it is still down by more than 50% from its all-time peak in 2021.
According to Horsley, the widespread use of bitcoin and other digital assets may be what propels the cryptocurrency market’s upswing in current cycle.
The bull market may be sparked by institutional mainstream counterparties, consumer use cases, and greater acceptance, which would see the number of users of decentralized applications increase from the five to ten million range to 100 million, according to Horsley.
Of all, the crypto industry is still in its infancy, and previous success does not guarantee future success.
According to Horsley, any improvement in the regulatory clarity for cryptocurrency in the U.S. might be very beneficial.
Regulatory clarity has been the main barrier to the development and adoption of cryptocurrency for the past four or five years. There will be certain projects and assets that fall outside the parameters as American regulators tighten their scrutiny of the sector. There will be a cost associated with that. However, the area as a whole will profit.
Crypto in barbell portfolios
Ben Weiss, CEO of CoinFlip, believes that given the present market climate, cryptocurrencies may be an excellent option for portfolios that use barbell methods.
The term “barbell strategy” describes a pair of asset baskets, one of which is quite safe and the other of which contains speculative but potentially very lucrative assets.
Despite the extreme volatility of cryptocurrencies, Weiss pointed out that bitcoin has performed far better than most other major assets both this year and over the past ten years. Weiss said that makes barbell portfolios an excellent combination of digital assets and Treasuries, which are currently seen as very safe and yield over 5%.
Crypto in a snap
According to data, the price of bitcoin on Thursday was about $29,728 after it dropped 2.9% over the previous seven days. Over the same time frame, Ether fell 1.7% to about $1,885.
