Bitwise: The Next Bitcoin Buyer Is Bigger Than Michael Saylor

**Matt Hougan** (0:00)
And one thing we've been talking a lot about internally at Bitwise is that DeFi assets have been performing exceptionally well. We have a DeFi index of 10 of the largest assets. It's up 51% over the last three months, which has been a terrible period for most of crypto.
Usually in the deepest, darkest bear markets, you don't have small cap assets rallying. Why are these assets rallying?

**John Gill** (0:25)
Strategy sold a little over $200 million worth of Bitcoin and Bitcoin price shrugged it off like nothing happened. Have we bottomed? Are the bulls back? Or is this just another fake out before another summer of selling pressure? Hello and welcome to The Milk Road Show, the podcast that knows that buying the dip these days feels like having your tortilla chip break off in the guacamole. I'm your host, John Gill. Today is Wednesday, July 8th. And today we are joined by Matt Hogan and Ryan Rasmussen of Bitwise. Matt is the Chief Investment Officer at Bitwise. Ryan is the Head of Research. And I am going to ask them a lot of questions about crypto. These are two of our favorite guests here at Milk Road. They all share a ton of alpha. So if that sounds good to you, make sure you like and subscribe. Share this episode with somebody who's going to enjoy it. Before we jump in, I want to make sure that you all know that if you want to see what our analysts here at Milk Road are buying, selling, and researching with live updates, 24-7 Milk Road PRO is 33% off this week only. So check the link in the description to take advantage of that. Come join our community. Today's episode is brought to you by Bitget Stocks 2 with real liquidity, real dividends, and Securitize, the regulated rails for tokenization. Without further ado, welcome back to The Milk Road Show. Matt, Ryan, how are you guys today?

**Matt Hougan** (1:33)
It's awesome to be here. Thanks for having us. We're really excited.

**Ryan Rasmussen** (1:36)
Yeah, do a long intro.

**John Gill** (1:38)
Yeah. Thank you so much. I'm getting a little better at these. Guys, let's just start the conversation right there. Saylor sold, or Strategy rather, announced that they sold 200 million of Bitcoin on Monday. Bitcoin seemed to barely notice.
Matt, I wanted to start with you. Your most recent CIO memo from Bitwise was all about Strategy, STRC, but that was all before this selling news. Does this update your outlook? What's your reaction to this? What are your thoughts here?

**Matt Hougan** (2:05)
No, it just convinces me that what I wrote was approximately right. My point of view was that Strategy has been a dominant factor in Bitcoin for the last handful of years. It was the largest buyer, and I think those days are over. Now, I think it's more of a neutral factor. I'd actually point to two things, John, that I saw over the last week or so. First, when we were at peak strategy stress, when we saw Stretch trade down to $74, $75, when we saw MicroStrategy Stock trade actually below its total enterprise, MNAV, we were at peak stress, Bitcoin didn't care. Bitcoin didn't move at all. I think at one point, Stretch was down double digits, Strategy was down double digits, and Bitcoin was flat. That told you something, which is that Strategy is no longer in charge.
Indeed, as you point out, when they actually sold Bitcoin, Bitcoin actually rallied on that news. I think the reason it rallied is people were worried that Strategy would stick its head in the sand and continue down a pathway of issuing Stretch and building up risk in that ecosystem. It turned out that they're actually what we all knew all long, which is a rational actor in the space that realized it needed to raise capital. People downrated the probability that they'll be forced into some stressed liquidation event.
Bitcoin rallied a little bit on the news. Look, I think I'll go back to what I said in my memo and at the start of this commentary, I think Strategy was the largest actor in Bitcoin for the last few years. It will still be important, but it's no longer the primary source of marginal capital. I think that's shifting to institutional investors, and I think that's what we're seeing in the market today.

**John Gill** (3:46)
Ryan, any thoughts on that? I want to get your thoughts on, is the fears over Strategy and STRC as an overhang, is that behind us or is that still something you're getting conversations about from clients?
What are your views on this here?

**Ryan Rasmussen** (3:58)