The assessment of Matt Hougan, the global head of research at Bitwise, creator of the world’s first cryptocurrency index fund reveals that bitcoin bull market was a bubble that burst in 2018 which attracted a lot of money and talent to the burgeoning industry.
Hougan told Bloomberg’s Barry Ritholtz on his podcast : “It was a massive run-up and a massive pullback,” “[It was a] total bubble.”
Hougan also said the bitcoin bubble fueled intense media interest in blockchain and the crypto market.
Hougan says the bitcoin bubble is not dissimilar to the Internet bubble of 1996 to 2001, which imparted similar collateral benefits to the then-nascent tech industry.
“It did the same thing that happened with the Internet, which is it attracted a huge amount of talent. It did bring a lot of capital and interest in development to the ecosystem.”
“So, I do think interesting things will be born from that. But, yes, it was a difficult year in 2018.”
“I think [bitcoin] is the next dotcom. Remember, the dotcom bubble created Pets.com, but it also created Amazon.”
Hougan also says that 95% of cryptocurrencies that exist today will go into extinction ― and that’s a good thing for the market.
“There are 2,000 cryptocurrencies out there; 95 percent of them are useless and will die a painful death. The sooner that happens, the better.”
“But from those ‘ashes,’ will merge important things. Just like from the dotcom ashes emerged Amazon, Google, and Facebook, etc.”