- Matt Hougan says the crypto crash was short-lived, not structural.
- Decentralized platforms proved resilient during market stress.
- Institutional confidence and fundamentals remain strong.
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Bitwise Chief Investment Officer Matt Hougan described last week’s crypto flash crash as a temporary disruption, not a structural failure. The drop came after President Trump’s surprise Truth Social post threatening 100% tariffs on Chinese imports — a response to Beijing’s warning to limit rare earth metal exports.
With traditional markets closed, traders reacted instantly in crypto, sending Bitcoin down nearly 15% to $100,000 on some exchanges. Ethereum plunged 20%, and Solana lost 40%. More than $20 billion in leveraged positions were liquidated — one of the largest wipeouts in crypto’s history. Yet, by Monday morning, Bitcoin had bounced back to around $115,000 as tensions eased.
“Nothing Fundamental Has Changed”
In a note to clients, Hougan emphasized that crypto’s core fundamentals remained strong. “Nothing fundamental to its outlook — its technology, its security, or the regulatory environment — changed,” he said.
He outlined three questions Bitwise examined in the aftermath:
- Did any major player collapse? No. Hougan said losses were limited to individual traders, with all major custodians and service providers remaining stable.
- Did the technology hold up? Yes, mostly. Blockchains and decentralized platforms like Aave and Uniswap operated smoothly under stress.
- How did investors react? Calmly. “If I’m bombarded with calls, that’s panic. This time, it was crickets,” Hougan noted, suggesting professional investors stayed composed.
Decentralization Shows Strength Amid Stress
While some centralized exchanges like Binance faced issues — including $283 million in refunds and a $400 million recovery plan — decentralized systems held steady. Hougan argued that this resilience demonstrates how well crypto infrastructure now performs under volatility compared to traditional markets.
Also Read: Bitwise Solana Staking ETF: Low-Fee 0.20% Fund Set to Attract Early Investors
Long-Term Confidence Intact
Hougan concluded the flash crash will leave “no lasting consequence.” He expects temporary liquidity pullbacks but sees the bull market resuming as traders refocus on fundamentals like institutional adoption and regulatory clarity.
“Crypto may be jittery in the near term,” he wrote, “but it will catch its breath — and the bull market will continue apace.”
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Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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