Crypto Flash Crash A Temporary Blip, Bitwise Says
Bitwise Chief Investment Officer (CIO) Matt Hougan has dismissed the recent crypto market flash crash as a temporary blip.
“Over time, I expect the market will catch its breath and renew its attention on crypto’s fundamentals,” Hougan said in a memo to investors. “When that happens, I think the bull market will continue apace.”
The flash crash was triggered when US President Donald Trump threatened on Friday to impose 100% tariffs on all Chinese imports.
This was in retaliation against China’s move to exert greater control over the export of rare earth metals that are critical to US technology manufacturing.
Trump threatens China with 100% tariffs (Source: Truth Social)
Crypto Traders Wiped Out
The Bitcoin price tumbled due to a cascade of leveraged positions unwinding, pushing liquidations to a record $19 billion.
At its worst, the BTC price plummeted 15% to $100K, while altcoins like Ethereum, Solana, and others also saw their prices undergo steep and sudden corrections.
While the crash has been one of crypto’s largest, Hougan said that “nothing fundamental” to the outlook for digital assets has changed.
”All of this suggests to me that this move won’t be of any lasting consequence,” he said. ”The long-term forces driving this market—improving regulation, increasing allocations from institutional investors, and a growing awareness of all the traditional markets that crypto is disrupting—are still intact.”
Crypto Showed Robust Underlying Technology
Hougan said that so far this year, Bitcoin is up about 21%, and the Bitwise 10 Large Cap Crypto Index is up 22%.
With Trump saying on Monday that ”all will be fine” with China, crypto prices have already recovered some of their losses.
The flash crash also showed crypto’s underlying technology to be robust, Hougan said, giving it ”a passing grade on this pullback.”
”Many DeFi platforms performed flawlessly: Uniswap, Hyperliquid, Aave, and others reported no losses,” he said. ”But a few centralized players like Binance had issues; in fact, it had to refund traders nearly $400 million. Taken together, crypto did as well or better than traditional markets would have done in the same situation.”
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