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Bitcoin off the lows after dipping below 50,000 having its worst week since the fall of FTX, though, the cryptocurrency is still sliding amid a larger correction across markets. Ethereum, by the way, briefly seeing its biggest single day drop since late 2021. Here with more on the state of crypto, we have Bitwise Asset Management CIO, Matt Hogan. Matt, it is good to see you. So, you know, you look at Bitcoin today, Matt, and coming under this pressure, I'm curious why why do you think it came under pressure, Matt? Is it because investors see it as just, you know, it's a very speculative asset because of margin calls. What are the reasons, Matt?

Yeah, I think you're pointing right at it. You know, we've seen this before in history. This reminds me a lot of what happened in the early days of Covid. I remember Bitcoin selling off 37% on March 12th, 2020. That day we woke up to the reality of Covid. It's a speculative asset, it's a liquid asset that can be sold, particularly on the weekends. Those things combine to draw the price down substantially. But when I look at it long term, you know, nothing much has changed about Bitcoin long term. If anything, the only thing that's changed in this market is we're closer to rate cuts, we're closer to, you know, more quantitative easing than less. I see it as a long-term positive. So short-term sell off, that's what history teaches us, but then I suspect we'll see a recovery in the relatively near term.

Why do you say that, Matt?

Well, just that's what we've seen in history. You know, the positive quantitative situations benefit Bitcoin. When the Fed lowers interest rates, that benefits Bitcoin. When they print more money to support the economy, that benefits Bitcoin. What we saw this weekend was challenges in Japan, challenges in the US economies, some weak economic prints. That means that we're closer to those easy monetary conditions and that's historically been a time when Bitcoins thrived. So again, short-term setback, but I still think we're on track to recover this and indeed move on to new all-time highs later this year.

And you don't think, Matt, um, just to play devil's advocate, the kind of pressure Bitcoin came under, it didn't, in your opinion, sort of dent the case for Bitcoin, or at least one case you hear investors make, which is that it is a store of value.

Yeah, I do think it's a store of value, but only if measured over long periods of time. Again, I'll give that Covid analogy. We fell sharply at the beginning of Covid, but if you've held Bitcoin since then, you're up 5-600%. Meanwhile, the value of the US dollar is down about 25%. So to the extent that people think it's an immediate, overnight, daily hedge against market volatility, well, that's not true and hasn't been true for a long time. But for most Bitcoin investors who are buying for the next three, five, ten years, its track record of storing value over those time periods are is very strong. And I think we'll see that repeat again. I don't think history will change this time.

What do you say to, Matt, maybe some viewers right now are thinking, I'm going to just I'm going to move into gold. I'm going to add to gold. Forget digital gold, I'll just take the metal, because gold came under pressure here too, Matt, but, you know, a lot less than Bitcoin, for sure.

Yeah, that's absolutely true. Look, I think it's completely reasonable for investors to hold both. We don't know exactly what the future holds. We don't know if the future is more digital or it's more physical if people want the new thing or they want the old thing. We work with plenty of financial advisors at Bitwise who have an inflation hedge portfolio that's 50% gold and 50% Bitcoin. I think that's completely rational. I'm just not sure I would put 100% of my chips in either of those baskets. So to the people buying gold, I think that's great. I think you might consider some Bitcoin and maybe vice versa. I think they work well together.

Why, Matt, did you see, I'm just looking at the charts, I mean, you saw Bitcoin come under pressure, the those Bitcoin ETFs though, Matt, they seem to come even under more pressure. Why is that?

Well, what you saw is they had to catch up, right? Remember those Bitcoin ETFs stopped trading on Friday at 4:00 p.m. They're part of the old world and then they have to catch up on Monday. I'll tell you actually underneath the service, we saw, you know, net inflows to our Bitcoin ETF today. So I think we're seeing that Bitcoin investors are long-term investors, they're not sort of paper hands who are folding. I suspect we'll see net inflows across many of the ETFs today. We certainly did on BITB.

Final question, Matt, I just want to talk politics for a second. Um, it's interesting to me, Matt, how Bitcoin right now seems to be breaking down pretty sharply along these ideological lines, political lines, Matt. You saw Trump speaking at the Bitcoin conference, he spoke, I mean, you know, I was just listening in, it seemed like the crowd loved it. But is that a healthy thing for for crypto fans, Matt? I mean, don't crypto fans, long term, wouldn't you like to have friends on on both sides of the political aisle?

100%, I agree with you. You don't want crypto to be a partisan issue. Technologies shouldn't be partisan. The internet is not a partisan issue. The best setup for Bitcoin is sort of stability from a regulatory perspective and clarity from a regulatory perspective. We don't want to be vacillating back and forth between two sides. I hope to see the Democratic side of the party sort of take on a more neutral position towards crypto. I actually think that is what we're going to see. So you're absolutely right, partisan is not perfect. You want bipartisan. I really think that's where we're going to end up by November, but it's worth watching what comes out of the Harris campaign and whether they moderate what has historically been a fairly hostile approach to crypto. But I think people inside crypto who are talking to them say that that's probably likely.

All right, Matt, always great to have you on the show, my friend. Thank you for joining us.

Thanks for having me.