Trump’s Trade Threats Against China Rocked Bitcoin: Why Matt Hougan Thinks It’s Just a Blip

The latest crypto market turbulence, seemingly triggered by a geopolitical shock, has as soon as once more examined traders’ nerves. But Bitwise CIO Matt Hougan believes it could finally reaffirm the energy of the continuing bull market.

The exec recounted the chain of occasions that despatched crypto costs spiraling late final week, solely to observe them rebound virtually as shortly – though, admittedly, to not the identical extent.

Nothing Fundamental Changed

The sudden drop got here after former US President Donald Trump threatened China with sweeping 100% tariffs on all imports in response to Beijing’s transfer to limit exports of uncommon earth metals. With fairness markets closed, merchants sought a real-time response mechanism and turned to crypto.

Within minutes, Bitcoin plunged by as a lot as 15%, and altcoins, led by Solana, noticed declines of as much as 40%. Nearly $20 billion in leveraged positions had been liquidated within the largest such occasion in crypto’s historical past, which ended up amplifying the sell-off via cascading liquidations. Despite this, most crypto belongings partially recovered after the US administration softened its stance.

According to Hougan, the important thing query is whether or not the episode was a fleeting blip or a sign of extra profound structural weak point. The exec discovered that nothing basic to crypto’s outlook modified, whereas citing the market’s underlying expertise, safety, and regulatory progress.

Hougan outlined three questions Bitwise makes use of to evaluate whether or not a market shock has lasting implications. These are whether or not any main establishments collapsed, how blockchain programs carried out beneath stress, and whether or not investor panic reached systemic ranges. None of these crimson flags appeared. No main corporations or market makers failed, and most losses had been confined to retail merchants who had taken extremely leveraged positions.

Technologically, decentralized platforms similar to Uniswap, Aave, and Hyperliquid continued working as standard with out disruption. Centralized venues did expertise some turbulence. Binance, for example, refunded merchants on a few separate events. But total, the crypto markets held up as nicely or higher than conventional ones may need in related circumstances.

Professional gamers largely ignored the occasion, in what seems to be a vote of confidence within the asset class’s long-term trajectory. That steadiness, he argued, signifies how far crypto markets have matured from the times when related volatility would spark panic. The broader image additionally stays encouraging. Bitcoin has gained 21% thus far in 2025, and Bitwise’s Large Cap Crypto Index is up 22%.

While short-term volatility could proceed as liquidity suppliers and market makers briefly step again, Hougan believes the market will quickly stabilize.

“But over time, I count on the market will catch its breath and renew its consideration on crypto’s fundamentals. When that occurs, I feel the bull market will proceed apace.”

Bitcoin Still Far from Peak Euphoria

According to on-chain analysis by CryptoQuant, Bitcoin’s MVRV ratio is presently close to 2.0. This degree has traditionally represented mid-cycle circumstances moderately than excessive valuations. The ratio remains comfortably beneath the 4.0 vary reached throughout prior bull market peaks, whereas nonetheless above the sub-1.0 ranges seen in main accumulation intervals. As such, long-term holders are refraining from heavy promoting, and institutional ETF inflows proceed to offer assist.

Miner exercise has additionally softened, which factors to lowered provide stress. These tendencies point out that Bitcoin is consolidating inside a constructive, mid-phase market atmosphere moderately than approaching an overheated or cyclical peak.

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