Bitwise CIO Matt Hougan sees the crypto market growing 5-10x bigger in the next few years, with the next market cycle likely catalysed by Ethereum’s merge.
Matt Hougan, CIO of Bitwise Asset Management, Says Ethereum (ETH) is Moving from a Proof-of-Work (PoW) Network to a Proof-of-Stake (Pos) Network, and the Announcement of the “Merger” Date is “a huge piece of news” – likely the signal that signals the start of a crypto bottom.
Hougan, speaking in an interview with Bloomberg on Friday, also believes the highly anticipated Merge puts Ethereum on the cusp of unprecedented adoption by institutional investors.
Merger is big, and not just for Ethereum
Last week, Ethereum developer Tim Beiko announced that the highly anticipated Merge update will take place in mid-September, and the reaction from the crypto market has helped the price of ETH soar. by more than 40%, from about $1,200 to more than $1,640. Ethereum had fallen below $1,000 earlier in the month.
Hougan says a bottoming process could be underway as a result of the announcement, with this probably marking the turning point that eventually heralds the next crypto boom.
“We can consider the merger – or the announcement of the date of the merger – as the only moment that took us from a sort of crypto winter to at least a sideways move before moving on to the next big move..”
As for Ethereum, Hougan says the network is poised for its biggest development since the explosion in decentralised finace (DeFi) in 2020. Ethereum has not seen as much institutional hype as Bitcoin, but the transition, the Bitwise exec believes, will help make the cryptocurrency an even more attractive asset for institutional investors.
“This will turn Ethereum into an asset that institutional investors increasingly feel attracted, even compelled to own… Institutional investors have mostly only been in bitcoin, but in the future of crypto they will be in bitcoin, Ethereum and, I would say, a wide range of assets.”
Catalyst for 5-10x market growth
DeFi, non-fungilbe tokens (NFTs) and stablecoins were all huge over the last bull market. Before that, it was Ethereum-based initial coin offerings in 2017 and prior to that, Bitcoin’s revolutionary, non-sovereign monetary system in early 2010s.
The future of crypto could see “five or six more killer products” emerge over the next few years. When this happens, greater adoption could see the market grow 5-10x. Hougan explained when he thinks it will happen.
“I think it will be the moment that crypto goes mainstream and your friends, your uncles, your cousins are all interacting with the crypto market through gaming, digital identity, music and NFTs ticketing, DeFi and stablecoins for payments,” he opined.
That kind of growth, he argued, might only be “a year or two away”.
During the Ethereum Community Conference (EthCC) in Paris earlier this week, co-founder Vitalik Buterin talked of the “long and complicated” journey that has been the transition to PoS.
He noted that the merger was only part of the roadmap that could end with Ethereum as “a more powerful and robust system in many ways.” But even then, with the pivotal merger, Ethereum would only be “55% complete”.
