Bitcoin (CRYPTO: BTC) is seeing a debate over its true identity, with Bitwise Chief Investment Officer Matt Hougan argueing that critics are missing the bigger picture.
Bitcoin’s ‘Identity Crisis’
Bitcoin has fallen more than 40% from its peak amid broader market uncertainty and geopolitical tensions, with no clear catalyst driving crypto prices higher.
The debate now centers less on price and more on purpose. If Bitcoin is not clearly the best hedge, payment system or speculative vehicle, what exactly is it?
A report by Bloomberg noted that geopolitical tensions and U.S. dollar weakness would typically strengthen the “digital gold” narrative.
Instead, investors have poured billions into gold exchange-traded funds while pulling capital from Bitcoin ETFs.
Critics argue Bitcoin has failed its macro test and continues to trade like a volatile risk asset rather than a safe haven. At the same time, institutional adoption and ETFs have pushed Bitcoin further into the mainstream, reducing its outsider appeal, while leveraged derivatives amplify price swings.
Supporters counter that Bitcoin has survived multiple crises.
The greater risk, they argue, is not collapse but a gradual loss of narrative dominance if no single use case takes center stage.
BTC: An Emerging Store Of Value?
ETF Prime podcast host Nate Geraci acknowledged growing skepticism around Bitcoin’s role.
But Matt Hougan of Bitwise Asset Management dismissed claims of Bitcoin as a failed hedge, weak payment rail or pure speculation as “terrible takes.”
Hougan said Bitcoin is best understood as an emerging store of value still in transition.
In 2009, he noted, Bitcoin was effectively 100% speculative because it was new and unproven.
If it achieves broad adoption and is eventually held by central banks like gold, it could approach 0% speculation. The shift from pure speculation to mature store of value, he argued, requires passing through multiple intermediate stages.
According to Hougan, Bitcoin feels confusing today because it is in that transitional “teenage” phase.
It is no longer purely speculative but not yet a fully established store of value.
That ambiguity, he said, is not a flaw but a natural part of its evolution.
Image: Shutterstock
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