Bitcoin may start to lose its reputation as a volatile asset.
According to Matt Hogan of Bitwise Asset Management, wild swings in cryptocurrency prices have declined significantly over the past decade.
“What's driving the bitcoin market right now is a little bit of an imbalance between supply and demand,” the company's chief investment officer told CNBC's “ETF Edge” on Monday. “We have a huge new source of demand from these ETFs, and we have inelastic supply.”
On January 11, the first Bitcoin exchange-traded funds began trading. Since then, the asset's price has risen by more than 50%. Bitcoin It reached an all-time high this week at just under $74,000.
However, Hogan admits it may not be for everyone.
“It moves a lot. Some people have a hard time understanding,” Hogan said.
While Bitwise is betting on Bitcoin's growth, ProShares has an ETF it's looking to profit from losses with. Short Bitcoin ETF Strategy. It's down 42% so far this year and down nearly 70% over the past year.
“To paraphrase Mark Twain, reports of our deaths are greatly exaggerated,” ProShares' Simeon Hyman told CNBC. “We're happy to be here, and we think we're serving as a major alternative.”
Hyman, the firm's global investment strategist, notes that bitcoin's historical strength has lasted much longer than the launch of spot bitcoin ETFs.
“This is the month of the anniversary of the collapse of financial institutions linked to cryptocurrencies. Last year, bitcoin was rising at that time as well,” Hyman said. “I think there are longer-term people who are starting to come in for asset allocation and diversification purposes.”
Hyman's ProShares also operates a long Bitcoin ETF: ProShares Bitcoin Strategy ETF. It's up 55% since January 1 and is up 111% in the past year.
As of Friday evening, Bitcoin was up 180% over the past 12 months.
