Bitcoin surged to its highest level on Monday since January 2nd.  The gains also come after a late Sunday rally for the cryptocurrency, when it surpassed the key price of $45,000, and also turned positive for 2022.  Matt Hougan, CIO of Bitwise Asset Fund, joins Cheddar News' Closing Bell to discuss what is behind the recent rallies for Bitcoin and other cryptocurrencies.

Closing Bell

Bitcoin & Other Major Cryptocurrencies Are Rallying

Okay, well joining me now for more on what is behind today's rally in Bitcoin and other cryptocurrencies as well as other stories in the space matt. Hogan chief investment officer of the Crypto asset manager. Bit wise, asset fund matt, it's great to see you nice gains today after Bitcoin. Certainly that we've seen over the weekend. What's behind this latest rally. Thanks for having me on Kristen there are lots of factors driving the rally today. There's buying by the luna foundation, there's excitement about the merge and its impact on ethereum but I think the overriding one is the sea change we're seeing in regulatory attitudes towards crypto. You mentioned in the last segment the positive news out of Britain about putting a constructive regulatory framework about Crypto Britain used to be very skeptical of crypto and that's changed just today, Janet Yellen who was the, probably the most skeptical member of the current administration on crypto came out with very constructive comments we saw the biden executive order mentioned positive things about crypto and regulation and fostering innovation. The change from regulators being skeptical to crypto to being supportive of it as an important driver of new disruption and new innovation is a big change and it's setting the stage for a bull market that I think will last for most of the remainder of the year, Interesting. Um, and how high Matt do you think the price of Bitcoin could rise through the end of 2022. Yeah, I mean it depends on many factors, of course, it depends on how aggressive the Fed is in raining and rates depending on whether we have a hard landing or a soft landing on the economy but the trends are in place to send I think many cryptocurrencies to new all time highs. I think there were so many positive developments in the last year around crypto, so many institutions moving into the space, so much venture capital activity, so much technological advancements and it was just being held back by these overarching regulatory concerns now that those are being removed now that we're taking a different approach on the regulatory side. I think you could see this sector, you know, trade to new all time highs in terms of its market capitalization as a whole. Is it just Bitcoin and perhaps ether the second most valuable Cryptocurrency a mat that you're bullish on or is this true of the entire crypto space? We talk a lot about all coins defi, N F T. S generally speaking, do you think the tide will rise or that there will be winners and losers? Yeah, I think for instance, ethereum is probably one of the best position cryptocurrencies at this moment I mentioned it's going through a major technical upgrade this summer which will reduce its carbon footprint, make it more attractive to institutional investors, introduced the ability to earn a yield on holding ethereum. I think it could be the institutional crypto asset of focus for most of this year. We will see a number of major winners though. There are other level one layer one chains that are going to do well, there's a lot of interest in layer two solutions defy continues to grow. I do think we'll see more differentiation. We're seeing crypto begin to really penetrate its use cases and that will mean that assets trade depending on how well they're being adopted for their utility, less sort of sector wide trends and more individual asset adoption. So I do think most boats will rise but there will be winners and losers in the year ahead. Here's another question Matt Ukraine obviously still being invaded tragically by Russia. But we've seen Cryptocurrency in that area. Even in Russia gained more steam of course, during times of uncertainty, the tragic situation still playing out in Ukraine. Is that a headwind, a tailwind for the crypto space? I think it's got good sides and bad side. It's been phenomenal to see the sort of reaction of the crypto community funding the efforts in Ukraine. Crypto is a tool of economic freedom. So people are aligned with what Ukraine is trying to accomplish in fighting back this invasion. I think we've seen the value of a decentralized financial service during times of crisis, right? There were lines at ATMs in Ukraine and in Russia, there are no lines to carry your crypto assets if you are fleeing that as a refugee. So we've seen those use cases, we've also seen the crypto needs to be able to align and exist with economic sanctions now, it's done a good job of that so far. But I expect to continue regulatory push to make sure crypto can exist in the institutional financial marketplace inside sanctions regimes. I think I can do it, but expect there to be, you know, volatility and developments around that story in the year to come, um that you have such a depth of knowledge when it comes to this space as the chief investment Officer. At bit wise, My final question to you is we're hearing of more regulation perhaps to protect retail traders from some of these newer, more complex assets. Bitcoin futures CTF, possibly even on the docket here, what do retail traders need to know when it comes to engaging trading and investing in Cryptocurrency? Yeah, I think this is true of Cryptocurrency and many other areas of the market, particularly as you get into complex products. There is a burden of education. I think it's important that we allow access to those products. Right. One thing I think we've done wrong is restrict access in regulated funds to crypto it's been the best performing asset class Over the last 10 years, but it is a burden on investors to educate yourselves. And if you're not able to do that work with a financial advisor who is an expert in that space as we get away from the most simple stocks and bonds into these more interesting, exciting alternative assets. You have to dial up the educational content. So do your research or work with a financial advisor who is an expert, is a great way to approach it. Alright. Matt Hogan see io a bit wise asset management matt. We always appreciate you taking the time to come on the show. Thank you.