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Bitwise CIO Matt Hougan has suggested that investors in only Bitcoin may be leaving gains on the table.
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Hougan compared the cryptocurrency landscape to the internet in 2004.
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Altcoins have experienced a resurgence in the past seven days.
In the volatile world of cryptocurrencies, flooded with millions of coins, it is easy for risk-averse investors to choose to stick with only Bitcoin. While there is likely nothing wrong with that, Bitwise Chief Investment Officer Matt Hougan has suggested that these investors may be leaving substantial future gains on the table.
“Bitcoin is the king of crypto assets—the largest, most liquid, and most established. In my opinion, it’s akin to ‘digital gold’ and is the only crypto asset with a shot at being a globally important currency. And yet I think most investors should own other crypto assets,” Hougan said in a note to investors on Tuesday.
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He compared the present cryptocurrency landscape to the internet in 2004, a marked shift from the usual comparisons to the dot-com bubble, which saw several internet-based firms boom and burst.
Hougan highlighted that in 2004, an investor optimistic about the future of the internet may have been tempted to invest in only Google as search was the dominant business and Google was king. He pointed out that they would have been okay, as the stock price has surged over 6,300% in the past 20 years. But he stressed that the internet was not only about search, adding that investors could have made better returns by also investing in the leaders of other verticals like retail, video and B2B software such as Amazon (NASDAQ:AMZN), Netflix (NASDAQ:NFLX) and Salesforce (NYSE:CRM).
“Google did exceptionally well. Today it’s one of the most valuable assets in the world. But other categories did well, too—in fact, the best performer turned out to be Netflix. That wasn’t obvious in 2004,” Hougan wrote.
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He said that, like the internet, blockchain technology has different verticals, from decentralized finance to tokenization, each with the potential to offer different returns over time.
“If you think blockchains are really only useful for protecting against the abuse of fiat currencies, my recommendation is just to buy bitcoin,” he said. “But if you agree with me that blockchains are a general use technology—if, for instance, you’re intrigued by the idea of nearly all the world’s assets moving onchain—history suggests you’d want to own a basket of crypto assets: Bitcoin, Ethereum, Solana, Chainlink, and more.”
Hougan’s recent note comes as altcoins have experienced a resurgence this week. For example, Ethereum, the second-largest cryptocurrency by market, has pared nearly half of its losses this year with a roughly 50% surge in the past seven days. Close competitors XRP and Solana are up 20% in the same period.
Hougan attributed the recent resurgence to “a general risk-on shift in the market.” This shift is likely due to easing global trade tensions and cooling inflation data.
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This article Bitwise Investment Chief Makes Case For Diversified Crypto Exposure, Compares It To Internet In 2004 originally appeared on Benzinga.com
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