Bitwise Chief Investment Officer Matt Hougan Remains Optimistic About Cryptocurrency Market in Q2 2025
Recently, Bitwise Chief Investment Officer Matt Hougan stated that despite the disappointing performance of cryptocurrencies in the first quarter, he remains optimistic about the cryptocurrency market in the second quarter of 2025. He pointed out four major factors that could drive price increases in the second quarter.
(Background: White House Digital Asset Officials: The U.S. May Use Tariff Revenue to Buy Bitcoin!)
(Supplementary Background: Not only the Federal Reserve, but the People’s Bank of China (PBOC) is also influencing the future trends of Bitcoin?)
Cryptocurrency Performance Dips Amid Trump’s Tariff Policies
The first quarter of 2025 has just ended, and under the global market turmoil caused by Trump’s tariff policies, the performance of cryptocurrencies has been quite lackluster. According to CoinGlass statistics: in Q1 of this year, Bitcoin’s price fell by 11.82%, and Ethereum plummeted by 45.41%, both marking the worst first-quarter performance since 2019.
U.S. Stock Market Still Under Pressure, Bitcoin Challenges $85,000
On the 17th, U.S. stocks remained under pressure as investors continued to monitor the progress of trade agreements, with the four major indices closing mixed.
- The Dow Jones Industrial Average fell by 527.16 points, or 1.33%, closing at 39,142.23 points
- The Nasdaq Composite dropped by 20.71 points, or 0.13%, closing at 16,286.45 points
- The S&P 500 index slightly rose by 7 points, or 0.13%, closing at 5,282.7 points
- The Philadelphia Semiconductor Index declined by 24.7 points, or 0.64%, closing at 3,832.47 points
Regarding Bitcoin, it briefly fell below $84,000 after the U.S. stock market opened last night but quickly rebounded and is currently challenging to stabilize above $85,000, overall performing relatively steadily.
Bitwise CIO: Four Factors Likely to Boost Cryptocurrency in Q2
In this context, Bitwise CIO Matt Hougan expressed in a recent market report that despite the disappointing performance in the first quarter, he remains optimistic about the cryptocurrency market in the second quarter of 2025.
Hougan identified four major factors that could drive price increases in the second quarter, including: 1) Increase in global M2 money supply; 2) The Trump administration’s friendly attitude toward cryptocurrencies; 3) Growth in stablecoin supply; 4) The impact of Trump’s tariff policies on investor behavior.
1. Increase in Global M2 Money Supply
Hougan pointed out that global central banks are shifting from years of tightening policies to monetary easing, with M2 money supply (including cash, demand deposits, and savings deposits) continuing to expand. He stated, “Historically, this environment is particularly favorable for risk assets, especially digital assets.” Just last night (17th), the European Central Bank also announced another interest rate cut, lowering the deposit rate by 25 basis points to 2.25%, marking the seventh cut since June of last year and reaching the lowest interest rate level since early 2023.
Other analysts share a similar view. For instance, economist Lyn Alden previously pointed out that Bitcoin’s price aligns with the direction of global M2 money supply 83% of the time. Additionally, Pav Hundal, chief analyst at Australian cryptocurrency exchange Swyftx, mentioned earlier that global monetary easing measures are reliable leading indicators for cryptocurrency price increases. If M2 continues to grow in Q2 2025, Bitcoin may see a significant rebound.
2. The Trump Administration’s Friendly Attitude Toward Cryptocurrencies
Hougan emphasized that the recent “wave of comprehensive regulatory relaxation” in the U.S. is one of the positive factors for the cryptocurrency market. He stated, “This is a long-term impact, and we are just at the beginning.” Looking back at the actions taken since Trump took office, he has announced the establishment of a “strategic cryptocurrency reserve” that includes Bitcoin, Ethereum, XRP, etc., aiming to position the U.S. as the “global cryptocurrency capital.” Moreover, Trump’s appointment of pro-cryptocurrency individuals, such as Howard Lutnick (Secretary of Commerce) and Paul Atkins (SEC), also demonstrates his determination to support digital assets. If the stablecoin bill (like the GENIUS Act) passes in the second quarter, it could further boost Bitcoin prices.
3. Growth in Stablecoin Supply
The asset management scale of stablecoins surged to a record high in the first quarter, which Hougan sees as a positive indicator for the cryptocurrency market’s rise. He believes, “The growth of stablecoin adoption will benefit related fields, including decentralized finance (DeFi) and other cryptocurrency applications.” Currently, the U.S. is promoting stablecoin legislation to provide a clear regulatory framework for stablecoins. Many analysts have previously pointed out that once the regulatory framework becomes clear, stablecoins may experience a new wave of growth, which will provide greater liquidity to the cryptocurrency market, including the influx of institutional-level funds.
4. The Impact of Trump’s Tariff Policies on Investor Behavior
Hougan pointed out that the “geopolitical turmoil” in the global economy during Q1 2025, particularly the tariff policies implemented since Trump took office, will prompt global investors to reassess their portfolios. He believes that the economic uncertainty caused by tariffs may increase demand for Bitcoin as a safe-haven asset.
In this regard, Zach Pandl, head of research at Grayscale, previously stated that tariffs could weaken the dollar’s position, creating space for non-dollar assets like Bitcoin. Michael Saylor, founder of Strategy, the leading holder of Bitcoin among U.S. listed companies, also emphasized that Bitcoin is unaffected by tariffs and is suitable as a hedge against inflation.
Finally, Hougan reiterated his optimistic forecast, stating that Bitcoin could rise approximately 138% from its current level of $84,080 by the end of the year. He stated:
“Last December, Bitwise predicted that Bitcoin would reach $200,000 by the end of the year. I still believe this is possible.”
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