The crypto industry has firmly established itself as a crucial component of the financial ecosystem, transcending political developments. Matt Hougan, Chief Investment Officer at Bitwise Asset Management, reinforced this sentiment in an investor note, emphasizing that the outcome of the recent US presidential election would not alter crypto’s trajectory. In his compelling note titled “Crypto Has Already Won,” Hougan remarked, “There is nothing left to say about Tuesday’s election.”
The Political Landscape and Crypto’s Resilience
Hougan provided a clear-cut analysis for investors, noting that in the short term, a Trump victory might be more favorable than a Harris victory. However, in the long run, Bitcoin, Ethereum, and stablecoins are poised to flourish regardless of who holds office. He highlighted the greater regulatory risks altcoins might face under a Harris administration compared to a Trump regime. Despite these concerns, Hougan remained optimistic, stating that the worst-case scenario would be a Democratic sweep, which could empower elements within the party that oppose crypto. Yet, even in such a scenario, Hougan expressed confidence in buying the dip.
Reflecting on Crypto’s Journey
Reflecting on the resilience of the crypto industry over the past four years, Hougan emphasized that Washington cannot halt crypto’s progress. It may influence the pace or introduce more clarity or confusion, but it cannot stop it. The presidential election serves as a vital checkpoint to assess the remarkable growth in the crypto sector since November 2020, despite facing a challenging regulatory environment.
The Growth of Crypto Assets and Market Dynamics
Hougan shared impressive statistics illustrating the industry’s progress. Comparing November 2020 to November 2024, Bitcoin’s price surged from $13,677 to $69,492, marking a 408% increase. Ethereum experienced a 552% rise, climbing from $388 to $2,492. Solana’s growth was particularly striking, with its value skyrocketing from $1.49 to $165.12, an astounding 10,982% increase.
Market Expansion and Trading Volumes
The trading landscape also evolved significantly. CME Bitcoin Futures Open Interest in October saw a dramatic rise, from $0.57 billion to $10.58 billion, a 1,756% increase. The seven-day moving average of crypto daily exchange volume expanded from $9.68 billion to $39.32 billion, reflecting a 306% increase. Additionally, decentralized exchange volume in October soared from $12.6 billion to $156.5 billion, an impressive 11,142% increase.
Asset Management and DeFi Advancements
Assets under management (AUM) witnessed substantial growth. The Bitcoin spot ETF AUM, previously nonexistent in November 2020, reached $71.46 billion by November 2024. Stablecoin AUM grew dramatically from $3.87 billion to $177.83 billion, a 4,495% increase. The total value locked in decentralized finance platforms increased from $9.57 billion to $139.3 billion, showcasing a 1,356% growth.
Network Activity and Mainstream Adoption
Network activity also saw remarkable increases. Monthly transactions on the Bitcoin network grew from 9.28 million to 20.48 million, a 121% rise. Ethereum and Layer 2 solutions witnessed a massive surge in monthly transactions, escalating from 33.3 million to 385.8 million, a 1,059% increase.
Mainstream Integration and Future Prospects
Indicators of mainstream adoption underscored crypto’s integration into traditional finance and politics. The number of top 20 asset managers with tokenized funds rose from none in 2020 to three in 2024. Moreover, BlackRock’s adoption of Bitcoin and Ethereum became a significant story in 2024, highlighting the growing acceptance of crypto assets.
Hougan expressed strong confidence in the continuation of these positive trends. He outlined several key expectations: continuous inflows into spot crypto ETFs, rapid growth of stablecoins, increased institutional allocations to Bitcoin and crypto, Wall Street embracing tokenization and real-world assets, advancements in blockchain speed and cost-efficiency, and the mainstream adoption of applications like Polymarket.
Conclusion: A Promising Future
While acknowledging the election’s significance, Hougan minimized its long-term impact on Bitcoin’s and crypto’s trajectory. He concluded, “Make no mistake: What happens in Tuesday’s election matters, particularly in the short term. But as I see it, over the long term, Tuesday will prove to be something between a speed bump and a wind gust. Neither is going to stop this train.”
As of the latest update, Bitcoin was trading at $68,932.
