Now Is the Best Time to Invest in Bitcoin (BTC), According to Bitwise CIO Matt Hougan

According to Matt Hougan, chief investment officer (CIO) of crypto-focussed asset management firm Bitwise, there’s never been a better time to invest in Bitcoin (BTC)

Matt Hougan, chief investment officer (CIO) at crypto-focussed asset management firm Bitwise, recently argued that there’s never been a better time to invest in Bitcoin (BTC) on a risk-adjust basis.

While you may be thinking that buying Bitcoin in 2010 seems like it would’ve been a better time, Hougan explained in his article, published March 25, that he believes now is a better time to buy — and it all comes down to risk.

Early Bitcoin adopters saw bigger gains than those investing today are likely to see, but they were also exposed to much larger risks, according to the Bitwise CIO. However, with the rise of reliable exchanges and advances like the launch of Bitcoin ETFs and Trump’s executive order to establish a strategic Bitcoin reserve, all the major risks associated with investing in Bitcoin have now been addressed.

Early Adopters of Bitcoin Took Big Risks

Hougan shared the story of when he personally missed his chance to buy Bitcoin back in 2011: after being told about Bitcoin’s potential by a colleague he decided to go grab a coffee instead of immediately buying $1000 worth of Bitcoin. Had he invested then, his $1000 would now be worth around $88 million.

However, Hougan points out, Bitcoin was still very much in its infancy in those days and investors had to deal with all kinds of questionable websites and shady characters to get their hands on some Bitcoin. He referred to the fact that a leading crypto exchange at the time — New Liberty Financial — handled exchanges through Paypal via a gmail address and described its service as a “personal hobby”.

As Bitcoin Has Matured, Risks Have Decreased Significantly

As Bitcoin matured as a technology the risks associated with investing in it have dropped substantially, massively improving the risk versus reward calculation, according to Hougan.

Over the years most serious risks associated with Bitcoin have been addressed, including the emergence of safe exchanges for trading crypto and secure custody solutions for holding it, while concerns about criminal activity, regulation, and mining concentration have also been largely alleviated, according to the Bitwise CIO, who claims that bitcoin has overcome every one of these “existential risks”.

When Bitcoin ETFs emerged in early 2024, according to Hougan, that addressed another major risk by providing regulatory clarity to institutional investors. However, one major risk remained: the risk that the US government would ban Bitcoin.

That risk essentially evaporated earlier this month, according to the Bitwise CIO, when Trump signed the executive order establishing a strategic Bitcoin reserve in the US.

According to Hougan, Trump has signalled the US government now sees Bitcoin not so much as a rival to the US dollar’s status as the global reserve currency, but instead as the “best backup plan on the market” should anything go seriously wrong with the fiat system:

Since the signing of the executive order, Hougan said Bitwise has already seen investors recognising this ‘derisking’ of Bitcoin and increasing the size of their holdings accordingly, with many increasing their Bitcoin allocations from the 1% range to 3%.

He believes this trend is set to continue, anticipating allocations of 5% or higher as more investors understand where Bitcoin is heading in the future.

“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 said.