Bitwise CIO: Strategy is no longer a one-way street for Bitcoin

Matt Hougan, Chief Investment Officer at Bitwise Investments, states that Strategy (formerly MicroStrategy) is no longer a one-way buyer of Bitcoin. According to Hougan, the company’s new capital framework has sufficient flexibility to also monetise Bitcoin when necessary. He views the recent turbulence around STRC and the price decline of MSTR as a classic end-of-cycle phenomenon.

Bitcoin is currently at $62K, an increase of 1.3% in the last 24 hours. Earlier, the Bitcoin price temporarily fell below $60.000, the lowest level since 2024. Hougan points to STRC, Strategy’s perpetual preferred equity vehicle, as the main culprit behind that dip.

Bitcoin is available at OKX and Bybit.

Comparison with the GBTC premium unwinding

In a detailed analysis, Hougan compares the current situation to the moment when the premium on the Grayscale Bitcoin Trust (GBTC) disappeared. At that time, it led to a significant unwinding of leveraged positions in the market, resulting in large price fluctuations. Hougan now sees a similar pattern with STRC and MSTR.

His conclusion is that excess leverage is being flushed out of the crypto market. According to him, this is no reason to panic, but rather a healthy and inevitable part of a normal cycle. He indicates that the volatility in STRC is a natural and important element of such a cycle, and that he believes the market is approaching the bottom. Earlier, we also wrote about analysts who see a bottom approaching based on other indicators.

Strategy has more room to manoeuvre than thought

An important point Hougan makes is that Strategy, thanks to its new capital structure, has more options than before. The company no longer needs only to accumulate Bitcoin, but can also sell or take other financial steps depending on market conditions. That makes Strategy less predictable as a buyer, but also less vulnerable in periods of stress.

That flexibility is relevant for investors who traditionally see Strategy as an unconditional Bitcoin bull. Hougan nuances that picture and draws attention to the company’s broader capital strategy. Meanwhile, Bitcoin ETFs continue to attract money, indicating that institutional interest in Bitcoin remains intact despite the recent turbulence.