Bitwise: The NYSE Just Picked Avalanche. Is Ethereum in Trouble?

Matt Hougan (0:00)

I continue to think most of the people who wanted to sell Bitcoin have left the market, and there's going to be a slow rise in tide after we get through this period of uncertainty.

John Gillan (0:10)

Bitcoin is fighting to hold on to $71,000, breaking down below $75K for the first time since August. Bitcoin ETFs just had one of their worst weeks since June. But at the same time, the New York Stock Exchange is going 24-7 on Avalanche, and Vitalik says that Ethereum is a store of value. What does all this mean for crypto? What does this all mean for Bitcoin? And what do investors need to know about all of this? Hello and welcome to Milk Road Crypto, the show that is feeling very grateful that Bitcoin doesn't have a CEO who wears leather jackets. I'm your host, John Gillan. Today is Thursday, November 12th. And today we are joined by the Bitwise boys once again, Matt Hougan, Chief Investment Officer at Bitwise, and Ryan Rasmussen, Head of Research at Bitwise. These are two of the smartest guys in crypto. I always learn a lot from talking to them. They're gonna break down everything that's going on in the markets and give us an update on what they are seeing. If that sounds good to you, make sure you like and subscribe. Share this episode with somebody who's gonna enjoy it. As a reminder, our podcast today is free and that would not be possible without our partners at Alumni Ventures, giving accredited investors access to private market investment opportunities alongside leading VC firms and Nexo, the digital asset platform that lets you trade, earn, and borrow all in one place, all from one account. Keeping an eye out for more information on both of our sponsors later in the show. But for now, welcome back to the program, Milk Road Crypto to my friends, Matt, Ryan, gentlemen. How are we today?

Matt Hougan (1:28)

Doing better than Jensen. I'm feeling pretty good today.

Ryan Rasmussen (1:34)

I don't know.

Matt Hougan (1:34)

How are you, Ryan?

Ryan Rasmussen (1:35)

Yeah, I'm doing well. I'm happy to be here.

John Gillan (1:38)

Well, I wish Bitcoin could join us today as well, but it's unfortunately falling out of bed right now, and I think a lot of people are scared about this. We've been ranging for around three months in a pretty bullish pattern, and now Bitcoin seems to be losing some strength here. A lot of people are scared. What are your initial reactions to this? Matt, let's start with you.

Matt Hougan (1:58)

Yeah, it is suffering a little bit. I think there is some risk on the downside. We've been saying at Bitwise that we expected a few weeks of volatility after the election, and then a resumption of the bull market following that. That's been our sort of consistent message in our CIO memo and other reports. The reason for that essentially is that the markets dislike uncertainty, and boy, is there a lot of uncertainty in the market today. Whether that's coming from what will the Democrats do vis-à-vis investigations when they come into Congress, whether that's coming from what will the Fed do vis-à-vis the increasingly sticky evidence of high inflation, or whether it has to do with this AI bubble unwind. So look, I continue to think there will be potential for softness. We don't think it revisits all the way down to the June lows. We do think it's a good opportunity to build positions, because we remain very optimistic for next year. What we're hearing in the field is large wealth managers continue to come into the space.

So short-term volatile, long-term, still pretty sanguine is my view today.

John Gillan (3:04)

Got you.

Matt, you told Laura Shin on an interview this week, I think we bottomed in June, but we're pessimistic on the next few weeks that echoes that sentiment there. Ryan, I'd like to hear your take on this, and is there a catalyst sometime in the near future here that you think might start to clear some of this pessimistic weight on the crypto markets?

Matt Hougan (3:25)

Yeah.

Ryan Rasmussen (3:25)

I mean, I align with Matt. We sat back for a long time ahead of the midterms, and saw where Bitcoin had had a pretty massive rally into the end of summer, and thought about what would happen in each scenarios across the midterms. Look, I'm bullish on the outlook for Bitcoin over the next six to 12 months. There's so much noise right now happening, but I think the important thing is that it's not happening to crypto markets alone. There's so much happening in capital markets around the world, geopolitics and the macro environment. And Bitcoin, yes, is trading down, but I think Bitcoin absorbed a lot of the selling over the past 12 months that we're now seeing equities experience. And there was a period this year where you saw crypto assets selling off aggressively while equities were rallying pretty momentously. And I think now we're kind of seeing a levelization of that, which is, I think, positive for Bitcoin and crypto assets going into 2027 If there's a specific catalyst in mind that I have, it's probably the anthropic IPO. I think there's massive, massive fear around AI right now, not to mention what's happening with NVIDIA, what's happening in geopolitics around that.