Written by: Matt Hougan, Chief Investment Officer of Bitwise
Compiled by: Saoirse, Foresight News
The sideways fluctuations of Bitcoin precisely signify that its “IPO moment” has arrived. Why does this mean a higher proportion of asset allocation? The answer is as follows.
In Jordi Visser's latest article, a key issue is discussed: despite the continuous stream of positive news — strong ETF inflows, significant regulatory progress, and sustained institutional demand — Bitcoin's trading remains frustratingly stagnant.
Visser believes that Bitcoin is undergoing a “silent IPO,” transforming from a “whimsical concept” into a “mainstream success story.” He points out that typically, stocks undergo a consolidation period of 6 to 18 months during such a transition before starting an upward trend.
Take Facebook (now Meta) as an example. On May 12, 2012, Facebook went public at a price of $38 per share. For more than a year afterward, its stock price fluctuated between sideways trading and decline, failing to break through the $38 IPO issue price for a full 15 months. Google and other high-profile tech startups also exhibited similar trends in their early public offerings.
Visser stated that sideways fluctuations do not necessarily indicate a problem with the underlying asset itself. This situation often arises because founders and early employees choose to “cash out and exit.” Those investors who boldly bet when the risks of a startup were extremely high have now reaped hundredfold returns and naturally wish to secure their gains. The process of insiders selling and institutional investors taking over takes time - only when this transfer of equity (or assets) reaches a certain balance will the price of the underlying asset reopen the upward channel.
Visser pointed out that the current situation of Bitcoin is extremely similar to the aforementioned circumstances. Those early believers who bought in when Bitcoin was priced at $1, $10, $100, or even $1000 now hold wealth that could span generations. Today, Bitcoin has “entered the mainstream” — ETFs are traded on the New York Stock Exchange, large corporations are incorporating it into their reserve assets, and sovereign wealth funds are entering the arena — these early investors finally have the opportunity to realize their gains.
This is worth celebrating! Their patience has finally paid off. Five years ago, if someone had sold $1 billion worth of Bitcoin, it would likely have thrown the entire market into chaos; but now, the market has a sufficiently diverse buyer base and ample trading volume to digest such large-scale transactions more smoothly.
It should be noted that the interpretation of on-chain data regarding “who is selling” is not uniform, so Visser's analysis is just one of the factors currently influencing market trends. However, this factor is crucial, and considering its significance for the future market undoubtedly holds important value.
Here are two key conclusions I have drawn from this article.
Conclusion 1: The long-term outlook is extremely optimistic
Many cryptocurrency investors felt frustrated after reading Visser's article: “The early big shots are selling Bitcoin to institutions! Do they know some insider information that we don't?”
This interpretation is completely wrong.
The selling off by early investors does not mean the “end of the lifecycle” of an asset; it merely signifies that the asset has entered a new phase.
Take Facebook as an example. Indeed, its stock price traded sideways below the $38 level for a year after its IPO, but today its stock price has reached $637, an increase of 1576% from the issue price. If I could go back to 2012, I would be willing to buy all Facebook shares at $38 per share.
Of course, if you had invested during Facebook's Series A funding round, the returns might have been higher — but the risks at that time were also much greater than after the IPO.
The same goes for Bitcoin today. In the future, while the possibility of Bitcoin achieving a hundredfold return in a single year may decrease, once the “asset allocation phase” ends, it will still have significant upside potential. As Bitwise pointed out in their report “Bitcoin Long-Term Capital Market Assumptions,” we believe that Bitcoin will reach $1.3 million per coin by 2035, and I personally think this prediction is still somewhat conservative.
In addition, I would like to add one point: there is a key difference between the market after early big players sold their Bitcoin and the market after a company's IPO. After a company completes its IPO, it still needs to support its stock price through continuous development—Facebook could not jump directly from $38 to $637 because it did not have enough revenue and profit at that time to support such an increase. It had to gradually achieve growth by expanding revenue, exploring new businesses, and focusing on mobile, and there were still risks in this process.
But Bitcoin is not like that. Once the early big players finish selling off, Bitcoin doesn’t need to “do anything” — the only condition required to grow from its current market cap of 2.5 trillion to gold's market cap of 25 trillion is to “gain widespread recognition.”
I'm not saying that this process will happen overnight, but it is likely to be faster than the rise in Facebook's stock price.
From a long-term perspective, Bitcoin's sideways movement is actually a “blessing in disguise.” In my opinion, this is a good opportunity to accumulate positions before Bitcoin resumes its upward trend.
Conclusion II: The era of 1% allocation in Bitcoin has come to an end.
As Visser stated in the article, companies that have completed an IPO have risks that are much lower than those in the startup phase. Their equity distribution is broader, they face stricter regulatory scrutiny, and they have more opportunities for business diversification. Investing in the IPO of Facebook is far less risky than investing in a startup founded by college dropouts operating out of a party house in Palo Alto (the core area of Silicon Valley).
The current situation of Bitcoin is no different. As Bitcoin holders shift from “early enthusiasts” to “institutional investors,” coupled with its continuously maturing technology, Bitcoin today no longer faces the kind of “existential risks” it did a decade ago; it has become a mature asset class. This is clearly reflected in Bitcoin's volatility — since the Bitcoin ETF began trading in January 2024, its volatility has significantly decreased.
Bitcoin historical volatility
Data source: Bitwise Asset Management Company. Data range: January 1, 2013 to September 30, 2025.
This change brings an important insight for investors: in the future, the returns on Bitcoin may slightly decline, but its volatility will significantly decrease. As an asset allocator, faced with this change, my choice will not be to “sell”—after all, we predict that over the next decade, Bitcoin will be one of the best-performing major asset classes globally—instead, I will choose to “increase my holdings.”
In other words, a decrease in volatility means that “holding more of that asset carries lower risk.”
Visser's article also corroborates a phenomenon we have long observed: over the past few months, Bitwise has held hundreds of meetings with financial advisors, institutions, and other professional investors, revealing a clear trend — the era of 1% allocation to Bitcoin is over. More and more investors are beginning to believe that a 5% allocation should be the “starting point.”
Bitcoin is experiencing its own “IPO moment.” If history is any guide, we should embrace this new era by “increasing our holdings.”
