Bitcoin makes a comeback, soaring nearly 35% in three months

Hougan described an unusual situation in which prices declined cyclically even as the industry’s fundamentals improved, including more transactions across blockchains and involvement from major firms such as BlackRock.

“So I think we had this unusual situation where you had a cyclical decline in prices even as you had a secular improvement in fundamentals. And now I suspect that prices are going to catch up toward the end of the year,” Hougan said.

“I don’t think if I came back next year, we’d still be below those all-time highs.”

The rally comes despite the U.S. Senate blocking the Clarity Act from advancing last week. The legislation would have established a regulatory framework for the crypto industry in the United States and divided oversight between the Securities and Exchange Commission, or SEC, and the Commodity Futures Trading Commission, or CFTC. The Genius Act, which passed last year, supported crypto prices.

Hougan believes the failure of the Clarity Act could actually help. “It’s the most pro-crypto SEC in the history of the U.S.; it’s the most pro-crypto CFTC in the history of the U.S. So ironically, in the absence of Clarity passing, we may actually have stronger pro-crypto regulation,” Hougan said.

The Bitwise CIO also said investors are rotating out of AI stocks and back into crypto. He said the AI boom had “sucked all the oxygen out of the room. Any investor who was a momentum-driven investor was focused on that. Now that that has sort of levelled off, you’re seeing that money rotate back into crypto.”