After macro uncertainty subsides in October and November, Bitwise chief investment officer Matt Hougan expects a big crypto surge.
September has a seasonal influence on financial markets, including crypto. In a Tuesday message to customers, Hougan noted that the U.S. presidential election, Federal Reserve rate reduction, and mixed Bitcoin and Ethereum exchange-traded fund flows are affecting market psychology.
Hougan believes the U.S. presidential race is a toss-up, with Polymarket showing Donald Trump leading Kamala Harris 53% to 46% ahead of Tuesday night's first debate. National surveys are more split.
“I suspect we'll see the market struggle to find its footing until we have greater clarity over future leadership and policy,” Hougan said.
There is unanimity on impending rate decreases, but a 50 basis point drop in September is unlikely. As the market approaches Wednesday's CPI and next week's Fed meeting, more than 125 basis point cuts by December seem likely.
ETFs like Bitwise's own Bitcoin and Ethereum funds offer a mixed picture. Bitcoin ETFs saw their longest net outflow since January, despite recent softening flows. Hougan says financial advisers are embracing Bitcoin ETFs “faster” than any other exchange-traded fund in history, despite research expert Jim Bianco's argument that adoption has been gradual.
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