Bitwise Chief Investment Officer: Farewell to the 1% Allocation, Bitcoin is Experiencing its 'IPO Moment'

Original Article Title: The Days of 1% Bitcoin Allocations Are Over

Original Article Author: Matt Hougan, Chief Investment Officer at Bitwise

Original Article Translation: Saoirse, Foresight News

The sideways movement of Bitcoin precisely marks its 'IPO moment.' Why does this signify a higher percentage asset allocation? The answer is below.

In Jordi Visser's latest article, a key question is explored: despite the continuous good news — strong ETF inflows, significant regulatory progress, and ongoing institutional demand — Bitcoin's trading is still frustratingly stuck in a sideways pattern.

Visser believes that Bitcoin is undergoing a 'silent IPO,' transitioning from a 'wild concept' to a 'mainstream success story.' He points out that typically, when stocks go through this transformation, they often consolidate in a sideways pattern for 6 to 18 months before entering a bullish trend.

Take Facebook (now Meta), for example. On May 12, 2012, Facebook went public at a price of $38 per share. For over a year, its stock price remained stagnant and fluctuated between sideways movement and declines, failing to surpass the $38 IPO price for a full 15 months. Google and other highly anticipated tech startups exhibited similar trends in the early days of their IPOs.

Visser states that sideways movement does not necessarily imply issues with the underlying asset itself. This situation often arises because founders and early employees choose to 'cash out and exit.' Those bold investors who took significant risks in early-stage companies, now reaping returns of a hundredfold, naturally seek to secure their gains. The process of insiders selling off and institutional investors taking over needs time — only when this equity (or asset) transfer reaches a certain balance, will the price of the underlying asset resume its upward trajectory.

Visser points out that Bitcoin's current situation is highly similar to the above scenario. Early believers who acquired Bitcoin at $1, $10, $100, or even $1000 now hold wealth that spans generations. Today, Bitcoin has 'entered the mainstream' — with ETFs trading on the New York Stock Exchange, large corporations incorporating it into their reserves, and sovereign wealth funds entering the scene — these early investors finally have the opportunity to realize their gains.

This is worth celebrating! Their patience has finally paid off. Five years ago, if someone had sold $1 billion worth of Bitcoin, it would likely have caused chaos in the entire market; but today, the market has a diverse enough buyer base and sufficient trading volume to more smoothly absorb such large-scale transactions.

It is important to note that on-chain data regarding "who is selling" is not interpreted uniformly, so Visser's analysis is just one of the current factors influencing market trends. However, this factor is crucial, and contemplating its significance for the future market undoubtedly holds valuable insights.

Here are the two key conclusions I extracted from this article.

Conclusion One: Extremely Optimistic Long-Term Outlook

Many cryptocurrency investors felt disheartened after reading Visser's article: "Early whales are selling Bitcoin to institutions! Do they know some insider information that we don't?"

This interpretation is completely wrong.

The selling off by early investors does not signify the "end of life" for an asset; it merely represents the asset entering a new phase.

Take Facebook, for example. Indeed, its stock price lingered around below $38 after the IPO for a year, but today, its stock price has reached $637, a 1576% increase from the issue price. If we could go back to 2012, I would be willing to buy all Facebook stocks at $38 per share.

Of course, if you had invested during Facebook's Series A financing round, the returns might have been higher — but the risks you would have had to bear at that time were much greater than after the IPO.

Bitcoin is the same today. Although the possibility of Bitcoin achieving a hundredfold return in a single year may decrease in the future, once the "asset allocation phase" is over, it still has tremendous room for growth. As Bitwise pointed out in the "Bitcoin Long-Term Capital Market Assumptions" report, we believe Bitcoin will reach $1.3 million per coin by 2035, and I personally think this forecast is still conservative.

Additionally, I would like to add one point: the post-sell-off market by early whales in Bitcoin differs from a market after a company's IPO. After a company completes an IPO, it still needs to support stock prices through continued development — Facebook could not directly surge from $38 to $637 because it did not have enough revenue and profit at that time to support such a rise. It had to gradually achieve growth by expanding revenue, exploring new businesses, and focusing on mobile, among other ways — a process that still carries risks.

But Bitcoin is different. Once the early whales are done selling, Bitcoin doesn't need to "do" anything anymore—the only condition required for its market cap to grow from the current $2.5 trillion to the $25 trillion gold market cap is to "gain broad acceptance."

I'm not saying this process will happen overnight, but it's likely to be faster than the rise in Facebook's stock price.

From a long-term perspective, Bitcoin's sideways movement is actually a "godsend." In my view, this is a good opportunity to accumulate chips before Bitcoin restarts its uptrend.

Conclusion 2: The Era of a 1% Bitcoin Allocation is Over

As Visser mentioned in the article, companies that have completed an IPO have much lower risk compared to early-stage startups. Their equity is more widely distributed, subject to stricter regulatory scrutiny, and have more opportunities for business diversification. Investing in a post-IPO Facebook is much less risky than investing in a startup founded by a college dropout operating out of a party house in Palo Alto (the heart of Silicon Valley).

The current situation with Bitcoin is similar. As Bitcoin holders transition from "early adopters" to "institutional investors," coupled with its continuous technological maturity, today's Bitcoin no longer faces the kind of "existential risk" it did a decade ago; it has become a mature asset class. This can be clearly seen from Bitcoin's volatility—since the Bitcoin ETF started trading in January 2024, its volatility has greatly decreased.

Bitcoin Historical Volatility

Data Source: Bitwise Asset Management. Data Range: January 1, 2013, to September 30, 2025.

This change brings an important insight to investors: in the future, Bitcoin's returns may slightly decrease, but its volatility will significantly decrease. As an asset allocator, faced with this change, my choice will not be to "sell off"—after all, we predict that in the next decade, Bitcoin will be one of the best-performing asset classes globally—instead, I will choose to "accumulate."

In other words, decreased volatility means "lower risk in holding more of this asset."

Visser's article also confirms a phenomenon we have long observed: over the past few months, Bitwise has held hundreds of meetings with financial advisors, institutions, and other professional investors and found a clear trend—the era of a 1% Bitcoin allocation is over. More and more investors are starting to believe that a 5% allocation should be the "starting point."

Bitcoin is experiencing its own "IPO moment." If history is any guide, we should embrace this new era through "HODLing."

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