Opinion: Bitwise CIO Matt Hougan Expounds on the Value of Bitcoin

Bitwise's Chief Investment Officer Matt Hougan explained the value of Bitcoin on Wednesday, responding after a recently interviewed Goldman Sachs executive struggled to find answers. Sharmin Mossavar-Rahmani, Chief Investment Officer of Goldman Sachs' wealth management division, stated that she is still not a "believer in cryptocurrency" even after the launch of Bitcoin spot ETFs in January. According to The Wall Street Journal, this executive claimed it was difficult to assign any value to Bitcoin due to its lack of inherent dividends, cash flow or earnings.

She said: "We don't think it's an investment asset class." Her view echoes those of other cryptocurrency skeptics like Warren Buffett and pioneers who denied their clients access to several Bitcoin spot ETFs launched in January. The largest among these ETFs were introduced by competitors BlackRock and Fidelity which have a more optimistic view about Bitcoin as "digital gold" and superior form of currency. So far, these ETFs have absorbed $12 billion in net inflows with financial platforms initially closed off from these products (like Merrill Lynch) now connecting them. Last month, Bitwise's Hougan noted that financial advisors are slowly accepting cryptocurrencies but issues regarding bitcoin’s “lack of cash flow” remain present. In response to Goldman Sachs' allegations on Wednesday, Hougan argued that the value of bitcoin comes from its ability to store wealth outside the legal currency system. He wrote: "What breaks people...and Wall Street models...is you can't pay fees for access this service; the only way is owning bitcoins."