Bitwise CIO Matt Hougan and European head of research André Dragosch have identified two significant risks that could drive Bitcoin into a new bear market. The first risk involves a potential collapse in AI stock valuations, which have become increasingly detached from their fundamentals. The second risk is a possible regulatory reversal in the US, particularly concerning the stalled progress on the Clarity Act. Hougan estimates a 20% chance of regulatory backsliding, while Dragosch cautions that an AI bubble burst could lead to a broad sell-off in risk assets, including cryptocurrencies. Bitcoin has already declined over 20% in the past two months, approaching bear market conditions.
Bitwise Warns of Potential Bitcoin Bear Market Amid AI and Regulatory Risks
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