Trump’s Trade Threats Against China Rocked Bitcoin: Why Matt Hougan Thinks It’s Just a Blip

The recent crypto market turbulence, seemingly triggered by a geopolitical shock, has once again tested investors’ ￰0￱ Bitwise CIO Matt Hougan believes it may ultimately reaffirm the strength of the ongoing bull ￰1￱ exec recounted the chain of events that sent crypto prices spiraling late last week, only to watch them rebound almost as quickly – although, admittedly, not to the same ￰2￱ Fundamental Changed The sudden drop came after former US President Donald Trump threatened China with sweeping 100% tariffs on all imports in response to Beijing’s move to restrict exports of rare earth ￰3￱ equity markets closed, traders sought a real-time reaction mechanism and turned to ￰4￱ minutes, Bitcoin plunged by as much as 15%, and altcoins, led by Solana, saw declines of up to 40%.

Nearly $20 billion in leveraged positions were liquidated in the largest such event in crypto’s history, which ended up amplifying the sell-off through cascading ￰5￱ this, most crypto assets partially recovered after the US administration softened its ￰6￱ to Hougan, the key question is whether the episode was a fleeting blip or a signal of more profound structural ￰7￱ exec found that nothing fundamental to crypto’s outlook changed, while citing the market’s underlying technology, security, and regulatory ￰8￱ outlined three questions Bitwise uses to assess whether a market shock has lasting ￰9￱ are whether any major institutions collapsed, how blockchain systems performed under stress, and whether investor panic reached systemic ￰10￱ of those red flags ￰11￱ major firms or market makers failed, and most losses were confined to retail traders who had taken highly leveraged positions.

Technologically, decentralized platforms such as Uniswap, Aave, and Hyperliquid continued operating as usual without ￰12￱ venues did experience some turbulence. Binance, for instance, refunded traders on a few separate ￰13￱ overall, the crypto markets held up as well or better than traditional ones might have in similar ￰14￱ players largely ignored the event, in what appears to be a vote of confidence in the asset class’s long-term ￰15￱ steadiness, he argued, indicates how far crypto markets have matured from the days when similar volatility would spark ￰16￱ broader picture also remains ￰17￱ has gained 21% so far in 2025, and Bitwise’s Large Cap Crypto Index is up 22%.

While short-term volatility may continue as liquidity providers and market makers temporarily step back, Hougan believes the market will soon stabilize. “But over time, I expect the market will catch its breath and renew its attention on crypto’s ￰18￱ that happens, I think the bull market will continue apace.” Bitcoin Still Far from Peak Euphoria According to on-chain research by CryptoQuant, Bitcoin’s MVRV ratio is currently near ￰19￱ level has historically represented mid-cycle conditions rather than extreme ￰20￱ ratio remains comfortably below the 4.0 range reached during prior bull market peaks, while still above the sub-1.0 levels seen in major accumulation ￰21￱ such, long-term holders are refraining from heavy selling, and institutional ETF inflows continue to provide ￰22￱ activity has also softened, which points to reduced supply ￰23￱ trends indicate that Bitcoin is consolidating within a constructive, mid-phase market environment rather than approaching an overheated or cyclical peak.