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In its latest investor memo, titled “The Great Derisking of Bitcoin,” Bitwise Asset Management has taken a bold stance on the future of the world’s original cryptocurrency. Chief Investment Officer Matt Hougan delivered a detailed analysis in a dispatch dated March 25, 2025, stating, “Now is the best time in history to purchase bitcoin (on a risk-adjusted basis).” The memo, which includes reflections on Bitcoin’s early days and an assessment of its biggest milestones, offers insight into why Bitwise believes the leading digital asset’s risk profile has shifted dramatically in recent years.
Best Time To Buy Bitcoin
In his opening remarks, Hougan recounts his introduction to Bitcoin back in February 2011, when he was working as part of a financial analytics team at ETF.com. During a routine market review meeting, one of Hougan’s young analysts brought up the fact that Bitcoin had just crossed $1—a landmark event that triggered a discussion about its underlying technology and potential use cases. “If I had invested $1,000 in bitcoin after that meeting, it would be worth $88 million today,” Hougan laments in hindsight.
This anecdote, however, is not simply a story of missed opportunity. Hougan underscores the risks that were pervasive at the time, emphasizing how the idea of transferring $1,000 to a “random PayPal address” through a nascent crypto exchange was a nerve-racking and largely untested proposition. Moreover, custody, regulatory clarity, and government oversight were virtually nonexistent, effectively turning any cryptocurrency exposure into a high-risk, high-reward gamble. “Throw in custody, regulatory, technological, and governmental risks … and putting $1,000 on bitcoin in 2011 was a massive gamble,” he explains.
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Central to Hougan’s thesis is that Bitcoin has, over the years, methodically overcome nearly every existential threat that once loomed. He notes that early attempts to create digital cash—such as the National Security Agency’s 1997 paper titled “How To Make A Mint: The Cryptography of Anonymous Electronic Cash”—never fully took off, making it far from guaranteed that Bitcoin itself would succeed.
From there, improvements in trading venues and custodial solutions gradually reduced the barriers to entry. When Coinbase launched in late 2011, it marked a pivotal moment by offering a more user-friendly and trustworthy on-ramp for retail and institutional investors alike. Major custodial providers, including Fidelity, would later extend their operational and brand strength to crypto, further mitigating concerns over security and storage.
Simultaneously, the once-pervasive fears of regulatory clampdowns began to wane. In 2024, the introduction of spot Bitcoin exchange-traded funds (ETFs) in the US removed another major roadblock. Hougan observes that broader acceptance in traditional financial markets made it easier for institutions to justify adding digital assets to their portfolios without worrying about opaque regulatory regimes or insufficient market surveillance.
“When bitcoin first launched, there was no guarantee it would even work. […] The incredible thing about bitcoin is it has slowly but surely knocked down each and every one of these existential risks over time,” writes Hougan, underscoring his view that Bitcoin’s evolutionary path has been one of measured resilience.
Bitcoin Last Threat Is Removed
One key question, however, continued to shadow Bitcoin’s rise: What if a major government decides to ban or severely restrict the cryptocurrency? Hougan points to a historical parallel: the US government’s gold confiscation order in 1933, enacted under President Franklin D. Roosevelt. The measure aimed to consolidate gold holdings to strengthen government reserves, fueling a common fear among Bitcoin investors that a similar ban could stifle the cryptocurrency’s growth or outright render it illegal.
“The US famously confiscated private gold holdings in 1933 to boost public coffers. Why would it allow bitcoin to grow large enough to threaten the US dollar?” Hougan acknowledges.
This worst-case scenario, he adds, was often tempered by reminding people that if Bitcoin did become significant enough to rival the dollar, “you’ll probably have done pretty well on your investment.” Still, uncertainty remained—until what Hougan views as a decisive event occurred earlier this month.
President Trump’s executive order establishing a US Strategic Bitcoin Reserve, signed in early March, seems to have addressed that lingering concern, Hougan says. By making a direct investment in Bitcoin, the US government effectively nullified the prospect of an outright ban, transitioning instead to a policy of strategic alignment. “And just like that, the last existential risk facing bitcoin disappeared before my eyes,” Hougan remarks.
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Critics have questioned why the US would endorse what could be construed as a competitor to the dollar’s status as the global reserve currency. Quoting Cliff Asness, founder of AQR Capital, Hougan points to the immediate query: “(I)f crypto is a viable long-term competitor to the US dollar, why on earth would we be promoting this direct competitor to our being the world’s reserve currency?”
In Hougan’s assessment, the US government is positioning Bitcoin as a hedge rather than relinquishing monetary dominance. If the dollar’s primacy does come under threat, Bitcoin presents a more controllable or, at least, more transparent alternative than a foreign currency such as the Chinese yuan. “The best-case scenario for the US is that the dollar remains the world’s reserve currency. But if we get to the point where that’s at risk, we’re better off moving to bitcoin than something like the Chinese yuan,” he adds.
Shifting Institutional Allocations
On the institutional front, Bitwise has already observed a noticeable shift in how investors allocate to crypto. As recently as two years ago, holding 1% in Bitcoin or other digital assets was considered relatively aggressive for a diversified portfolio. This allocation was meant to capture speculative gains while limiting exposure to what still felt like a nascent, unpredictable market.
Today, however, with a new level of government-endorsed legitimacy and more regulated pathways to invest, the firm is seeing more clients adopt allocations nearing 3%. Hougan notes that this trend reflects a profound change in perception: Bitcoin is no longer just a gamble; it is a credible alternative asset. “As more of the world wakes up to the massive derisking we’ve seen in bitcoin, I think you’ll see this number rise to 5% and beyond,” he forecasts.
At press time, BTC traded at $87,865.
Featured image created with DALL.E, chart from TradingView.com
