**Bitcoin is nearing a market bottom as the selloff in Strategy's STRC convertible notes reflects end-of-cycle deleveraging dynamics typical before a price recovery, according to Bitwise Asset Management's chief investment officer.
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Bitcoin 46% off peak as Bitwise CIO says bottom nears on STRC selloff
Bitcoin is nearing a market bottom as the selloff in Strategy's STRC convertible notes reflects end-of-cycle deleveraging dynamics typical before a price recovery, according to Bitwise Asset Management's chief investment officer.
Bitcoin, 46% below its $126,000 peak, is nearing a bottom as Strategy's STRC selloff reflects end-of-cycle deleveraging, Bitwise CIO Matt Hougan said.
"The sharp volatility in STRC combined with the pullback in MSTR's stock price are typical characteristics of the end of a cycle," Hougan said. "The market is currently in a clearing phase, and the problems exposed by STRC are an inevitable part of cyclical adjustment."
Bitcoin traded near $68,000 as of Friday, down 0.2% in the past 24 hours and roughly 25% year-to-date, according to CoinGecko. The Crypto Fear & Greed Index has entered extreme fear territory, while derivative funding rates remain persistently negative — both signals Hougan cited as bottom indicators. MSTR, the stock of Strategy, is trading below its net asset value per share, a condition he described as a key sign that market greed has shifted to panic.
Hougan said he expects a new bull market to begin this autumn, though he cautioned that no one can predict the exact bottom in real time. "The market bottom can only ever be confirmed in hindsight," he said. Retail sentiment on Stocktwits has dipped to neutral from bullish, with a poll showing most traders ready to buy if bitcoin drops another 20%.
The comments add a prominent institutional voice to a growing consensus that the worst of the drawdown may be over. Bitcoin has fallen 46% since reaching an all-time high of $126,000 in October, a decline that Hougan attributed primarily to traders unwinding long positions — selling spot exposure, closing leveraged bets and writing call options against their holdings — rather than any structural flaw in the asset.
Jeff Park, chief investment officer at ProCap and an advisor at Bitwise, said the focus on individual firms such as Jane Street as villains in the selloff misses the larger issue. "The more important question is not whether a particular firm is the villain," Park said. "It is whether a regulatory framework designed for traditional ETFs is appropriate for an asset whose core value proposition is independence from the financial institutions now tasked with intermediating it."
The STRC selloff has been among the top trending topics on Stocktwits, with many users echoing Park's view that the system gives large players such as BlackRock, State Street and Vanguard outsized influence over bitcoin's price. Hougan dismissed the search for blame. "People want someone to blame — I get it — but the reality is far more boring than that," he said.
This article is for informational purposes only and does not constitute investment advice.
[1] ‘I think we're nearing the bottom': Bitwise CIO says Strategy's STRC selloff is part of bitcoin's end-of-cycle dynamics[2] Why Is Bitcoin Down? Bitwise CIO Says The Real Reason Is 'Boring,' Crypto Spring Still Ahead - Stocktwits[3] Bitwise CIO: The current market is at the end of the cycle, and a new bull market will begin this fall - Bitget
