Bitwise’s Matt Hougan says the recent cryptocurrency market correction is reminiscent of March 2020: a big opportunity for bulls.
Hougan claims on social media platform X that the Covid-induced crash of March 2020 “supercharged” the reasons for Bitcoin’s long-term rise, while its short-term price was decimated.
“It showed us that central banks would be ready to bail out the economy at the first sign of trouble. It demonstrated the limits of centralized institutions. And it reminded us that the future is digital.
All these changes showed that Bitcoin was becoming more important, not less important. In the long run, that’s exactly what happened.
“I see the same situation today.”
Hougan says difficult macroeconomic developments, including sudden rate hikes by the Bank of Japan and heightened tensions in Israel, as well as selloffs by cryptocurrency firm Jump, have created a perfect storm for a sharp market pullback.
However, despite Bitcoin (BTC) falling below $50,000 and altcoins correcting sharply, Hougan says current conditions are “straight out of the Covid scenario.”
The IOC says a new wave of looser monetary policy is now inevitable, something that has historically inflamed cryptocurrency markets.
“In recent days, the probability of a 50bp rate cut by the Federal Reserve in September has increased from 11% to 98%. Some are even calling for an “emergency cut” before the September meeting.
In other words, the printer is coming. It should come as no surprise. It happened during the Covid crisis. It happened after the Eurozone crisis in 2010. And it happened in 2008…
Historically, when we have seen this type of global economic panic, cryptocurrencies have initially declined, but finished much higher a year later.
Maybe this time it will be really different, but I wouldn’t bet on it. In fact, I’d bet the other way.
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