Crypto Brief: Wall Street Downplays Binance Hack as Bitwise Sees ‘Recovery In a Week’

In the current cycle, wall Street analysts are telling clients to buy the dip after the $6.3 billion Binance hack, and Bitwise CIO Matt Hougan expects bitcoin’s valuation to recover fairly soon.

Hougan, chief investment officer at crypto asset manager Bitwise, played down the damage, stating: This hack has not changed anything about the long-term direction of Bitcoin.

I think in a week you’ll see quote has recovered.

He made a similar point to Reuters, saying that “hot wallet hacks — even large ones — have historically not had a meaningful impact on future crypto returns.” Not only that, he believes traders typically treat such incidents as one-off events.

With this context in mind, it is visible that the selloff was real but limited, as bitcoin fell to a six-week low of $76,368 after the breach while ether dropped to a two-month low of $2,178.

At press time, bitcoin has since steadied near $77,000, with Hougan’s optimism being consistent with Bitwise’s view of bitcoin’s long-term path that has the asset reaching 1.6 million.

Brokerage analysts lined up behind the buy-the-dip case, and TD Cowen’s Lance Vitanza argued the hack exposed weaknesses in Binance’s security, not in bitcoin’s technology, writing: We do not stop using dollars when a bank is robbed, just as car theft does not invalidate the automobile.

Cantor Fitzgerald’s Ramsey El-Assal was just as direct.