(33) The Most Important Chart in Crypto Right Now
Matt Hougan - Chief Investment Officer
Retail sentiment in crypto is terrible even though the fundamentals are great. I smell opportunity.
There is a fascinating dichotomy in crypto right now between institutional and retail investors.
On the one hand, institutional sentiment towards crypto is the most bullish I’ve ever seen. When investment professionals look at crypto today, they see this: Institutional capital is allocating to the space in record amounts via ETFs, and Washington has gone from being one of crypto’s biggest threats to one of its biggest champions.
Things we only dreamed of a year ago—like nation-states adopting strategic bitcoin reserves—now seem somewhere between possible and imminent. And the biggest risks to crypto, like government bans or legal threats to software developers, are distant nightmares.
From a risk-adjusted perspective, it is arguably the best time in history to invest in crypto.
And yet.
Today, retail investors are wallowing in despair. It’s almost as if they are living in an alternate reality. We have a proprietary crypto sentiment score at Bitwise that looks at onchain data, flows, and derivative analytics to determine the mood of crypto investors. It’s at one of its lowest readings of all time.
Crypto Websites:
https://crypto4060.blogspot.com
Crypto Asset Sentiment Index
Source: Bitwise Asset Management with data from Bloomberg, CoinMarketCap, Glassnode, NilssonHedge, Alternative.me, and Bitwise Europe.
This aligns with the vibes I get from “crypto Twitter,” along with other sentiment indicators in the market.
Retail investors are sad because non-bitcoin crypto assets (often called “altcoins”) are doing poorly. The heatmap below from TradingView shows the returns of all crypto assets on a year-to-date basis. While there are a few green spots—most notably for Bitcoin, Solana, and XRP—it’s mostly a sea of red. The average crypto asset is getting crushed.
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