Bitwise's Chief Investment Officer, Matt Hougan, compares the current crypto market to the early days of the Internet, suggesting that while Bitcoin is leading, similar to Google in 2004, investors should still consider diversifying their crypto portfolio.
- Bitcoin is likened to 'digital gold', being the asset with the greatest potential to become a global currency.
- However, Ethereum has surged nearly 40% in the past week, indicating that the crypto market still holds much potential beyond Bitcoin.
- According to Bernstein analysts, Ethereum's price surge comes from the boom in stablecoins and tokenization, the development of Layer 2 solutions, and closing short ETH positions.
- Hougan from Bitwise adds that Ethereum's Pectra upgrade and the trend of risk appetite returning to the market are also important factors.
Hougan thinks back to 2004, when investing solely in Google was a good strategy, but those who also bought Amazon, Netflix, and Salesforce reaped even greater profits. Similarly, blockchain is a versatile foundational technology:
- Bitcoin serves the purpose of being 'money/asset'
- Ethereum, Solana, Avalanche create a network for application programming.
- Chainlink acts as middleware.
- Coinbase, Circle, Marathon support industry infrastructure.
His conclusion:
- If you only see blockchain as a tool against the risk of fiat currency depreciation, just hold Bitcoin.
- But if you believe in the future of global assets moving on-chain, diversify: Bitcoin, Ethereum, Solana, Chainlink, etc...
- Instead of trying to pick winning projects, invest according to the overall trend, as most active fund managers do not outperform benchmark indices (such as SP500, NASDAQ), especially in fast-changing fields like crypto.
