Bitwise CIO Not Fazed By Short-Term Bitcoin Price Moves, Says BTC’s “Service” Gives It Value
Bitwise Chief Investment Officer (CIO) Matt Hougan says he is not too concerned with Bitcoin’s short-term price movements, and argues that BTC’s value stems from the “service” it provides investors.
That’s as Bitcoin’s price slid a fraction of a percentage in the past 24 hours to trade at $91,275.53 as of 7:05 a.m. EST. This latest loss has seen the crypto king nudge its weekly performance deeper into the red. As a result, Bitcoin is now down more than 13% on the 7-day time frame.
BTC price (Source: CoinMarketCap)
Bitcoin Is Not An Object, But A Service
In his latest memo to clients, Hougan said that the one question he hears a lot when talking with financial advisors is why Bitcoin has any value at all.
He added that advisors often point out that BTC doesn’t generate profits or cash flow, and it can’t be touched. They subsequently question why the crypto has a capitalization of $2 trillion.
Hougan says that in order to answer that question, investors and advisors need to view Bitcoin as a service, and not as an object. According to the CIO, the service that BTC provides is the ability “to store wealth in a digital format without relying on a government, bank, or other third party.”
“The reason I like reframing bitcoin as a ‘service’ is that I think people get hung up on the fact that you can’t touch it,” he said.
BTC Wouldn’t Be Up 28,000% If Nobody Wanted Its Service
To expand on his point, Hougan mentioned Microsoft and the service it offers, noting how the company allows users to edit documents, manipulate spreadsheets, host virtual meetings, etc.
The CIO then said that in order to get access to Microsoft’s service, he has to subscribe to Microsoft365, which he pays $99.95 per year for.
“To say something obvious: The value of Microsoft’s stock is tied to how many people want its service,” he said. “Other things equal, the more people who want Microsoft’s service, the more valuable the company becomes,” Hougan added.
He then said that “Bitcoin is similar,” adding that if nobody wanted the service that Bitcoin provides, BTC’s value would be zero.
Hougan went on to highlight how BTC’s price has risen around 28,000% over the last ten years, which he says is evidence that demand for Bitcoin’s “service” is growing.
“In our increasingly digital age, with governments piling up more and more debt, I’m guessing a lot more people will want its service in the future,” he concluded.
Buying Bitcoin Now Will Pay Off In Coming Years, Analyst Says
Looking at Bitcoin’s charts, renowned trader and analyst Michael van de Poppe recently told his 814.7K X followers that BTC’s volatility remains high. He added that indicators suggest “markets are a little overextended to the downside,” but warned that reversals take time.
Van de Poppe then said that buying Bitcoin at its current levels “will be great over the coming years.”
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