Bitwise CIO: Bitcoin is in the bottoming phase; the decline is due to long-term holders selling rather than market manipulation conspiracy theories

On February 27, Bitwise Chief Investment Officer Matt Hougan wrote, “Conspiracy theories are endless. First it was CEX, then Wintermute, then some unknown offshore macro hedge fund, then ‘paper Bitcoin,’ and today it’s Jane Street. Next week, it might be someone else. The real reason for Bitcoin’s decline is that a group of people who previously went long on Bitcoin sold their Bitcoin exposure. They sold in the spot market, unwound leveraged positions, and reduced exposure by selling call options. They sold because of the ‘four-year cycle,’ concerns about quantum computing, hopes to invest in AI startups, and various other reasons. Most of their selling has already been completed, and we are in the process of bottoming out. New all-time highs are still to come. This is a typical crypto winter, which will eventually give way to a typical crypto spring. People always want to find someone to blame—I understand this sentiment—but the reality is often more mundane than conspiracy theories.”