Bitwise CEO's Optimism: Collapse Anticipates Major Recovery

There is an understandable concern in the air, due to the collapse of first the Asian and then the global stock exchanges, which downgraded global finance during Sunday and Monday. The cryptocurrency sector was also stung. Panic gripped almost every investor. Anyone who had an open position in the markets, including traditional stock markets, far removed from the cryptocurrency sector, was dragged into the eye of the storm.

From the Collapse the Beginning of a Bull Run?

While pessimism is rampant, there are those who see things from a diametrically opposite point of view, such as the CEO of Bitwise, Hunter Horsley. His company trades Bitcoin and Ethereum and is based in the US. The executive commented on this downturn, as many of his counterparts are doing, stating that, in his opinion, we will look at this moment in the future as the foundation of a major bull run, driven by BTC.

Bulls and Bears

The term bull run (and its opposite, bear run) are part of a very specific financial terminology, now commonly adopted around the world. When we speak of a bull run, we have to think of the goring of a bull (bull in English) that is thrown at the poor unfortunate from the bottom upwards. The parallelism with the financial market is due precisely to this movement: as the bull gathers upwards, the bullish market also rises from lower to higher values, and is therefore on the rise.

In contrast, a bear strikes its prey, or its opponent, with its mighty paw, performing a top-down movement. The symbolism, in this case, indicates a bear market, which follows the motion of the woodland grizzly's attack.

Horsley's Opinion on the Crash

"As hard as it is to imagine, I think we will look back on this day as the makings of an incredible bull run for Bitcoin. As rates fall and recession fears grow, so many dollars that are now parked in equities will be looking for a new home."

Bitwise's CEO delivered his prediction in a tweet. Some believe he did so only to boost the morale of those concerned who had fallen into despondency in the wake of the massive losses in global markets. According to other experts, however, Horsley may be right. The rate cut by the Federal Reserve and, consequently, other central banks, should come as early as September. As far as the US, Bitwise's target market, is concerned, only the certainty of the date is missing. Already a cut of 50 basis points is anticipated.

The most likely consequence of the downsizing will be a reduction in fear of a coming recession and the spread of positive sentiment, which could lead to considerable money movements. These funds will be shifted, transferred from the stock market to other assets. These will most likely include cryptocurrencies and, at the forefront, Bitcoin.

Hard to say if Horsley is right

You cannot subscribe to Horsley's opinion. Similarly, one cannot oppose it either. At the time of writing this article, we have no data to be able to speculate what will happen in a few weeks' time. We feel we can predict that the here-and-now panic, typical of when one witnesses such a collapse, is likely to recede relatively quickly.

Between now and September, then, there will be plenty of data, which will be able to tell us in more or less real time how the US economy is performing. If we should see signs of recovery, even tepid ones, and see an effective rate cut during the next month, we should give Bitwise's CEO credit for having seen the light after this sudden collapse.

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