Bitwise Chief Investment Officer Matt Hougan has weighed in on the recent selloff in Strategy's STRC, arguing the move is a textbook example of 'end-of-cycle' deleveraging that historically precedes a bitcoin market bottom. 'I think we're nearing the bottom,' Hougan told The Block, framing the event as a natural part of crypto markets' cyclical behavior.
The selloff in STRC—a leveraged instrument tied to Strategy's bitcoin holdings—reflects forced deleveraging typical of late-stage bear markets, according to the CIO. Hougan's comments come amid broader market uncertainty, though he offered no specific price targets or timeline for a recovery. Bitwise manages approximately $10 billion in crypto-related assets as of its latest filings.
Regulatory implications remain unclear. The Securities and Exchange Commission has not issued recent guidance on leveraged bitcoin products, though Chair Gary Gensler has previously warned of 'significant risks' in crypto derivatives. Hougan's 'end-of-cycle' framing implicitly acknowledges that bitcoin downturns have historically been followed by regulatory aftermath, including enforcement actions against firms caught in the deleveraging cascade.
Bitcoin's market cap currently stands at roughly $1.1 trillion, representing about 55% of the total crypto market according to CoinGecko data. The selloff in STRC and broader market weakness have not significantly altered bitcoin's dominance ratio, which remains near multi-year highs as altcoins underperform relative to the flagship cryptocurrency.
Community reaction has been mixed. On Crypto Twitter, some longtime bitcoiners echoed Hougan's bottom-call sentiment, while skeptics pointed to macroeconomic headwinds such as persistent inflation and hawkish Fed policy that could delay any recovery. Competing asset managers like Grayscale have not publicly commented on the STRC situation.