Matt Hougan, the Chief Investment Officer at Bitwise, remarked that the recent upheaval triggered by President Trump’s threat of implementing a 100% tariff on China had not resulted in lasting damage, nor did it alter the fundamental outlook of the cryptocurrency market. This tumult, which began with a wave of sell-offs on Friday night, accelerated the liquidation of leveraged positions, amounting to an estimated $20 billion. Bitcoin 
$0.005771 experienced a 15% drop to hover around the $100,000 range on several exchanges, while Ethereum 
$2,411 plunged over 20%, and Solana 
$90 fell more than 40%. However, the new week saw Bitcoin recover to approximately $115,000, currently stabilizing around $112,500.
Hougan: Market Foundations Hold Firm
In a note sent to investors on Tuesday night, Hougan emphasized that the rebound after the cryptocurrency market crash was due to the lack of changes in core elements. He stressed that the infrastructure technology, security architecture, and regulatory framework remained intact. Hougan mentioned that no conditions emerged that could influence the long-term direction; the tremor was mainly a result of liquidity withdrawal and a cascading effect triggered by deleveraging.
Investor behavior mirrored this sentiment. Hougan noted that despite increased media attention, there were no panic calls from professional funds. He observed, “If the inbox is quiet, there is no lasting insecurity.” He added that while market makers’ cautious stance might momentarily boost volatility, the upward cycle could continue once the focus returns to the fundamental narrative.
The Resilience of the Crypto Sector
Hougan based his assessment on three questions. He first examined whether any major player had collapsed, concluding from his discussions with partners, from custodians to liquidity providers, that losses were primarily confined to individual and leveraged trades while institutions remained steadfast.
On the technological front, Hougan noted that Blockchain networks continued to function under stress efficiently, with protocols like Uniswap, Hyperliquid, and Aave operating without issues. He acknowledged disruptions on some centralized platforms, citing Binance, which issued $283 million in refunds following depeg incidents and subsequently initiated a $400 million improvement initiative. Overall, he concluded that the cryptocurrency infrastructure managed high volatility as effectively as traditional markets.
