Matt Hougan, chief investment officer at Bitwise, said that the world is waking up to the "madness" of fiat currency experiments, with central banks buying record amounts of gold and individuals turning to Bitcoin – making people realize that fiat currencies may no longer be the undisputed default currency as they used to be. With U.S. debt approaching $37 trillion, gold overtook the euro last year to become the second-largest reserve asset, Hougan continued, as central banks sought a scarce, global, self-custodial hedge against government manipulation. He stressed that these properties are not just for gold. He argues that, like governments, individual investors are becoming aware of the risks of uncontrolled money printing, but they have mostly turned to Bitcoin, which is often seen as a digital alternative to gold. He noted that Bitcoin ETFs have attracted $45 billion in inflows since January 2024, surpassing the $34 billion for gold-backed ETFs. He explained that the current gap between public and institutional acceptance of Bitcoin is largely about size. Despite growing demand, the Bitcoin market is still $2 trillion, which is still too small and illiquid for central banks to access effectively.
