Last Friday, there was a major collapse that began with US President Donald Trump's announcement of tariffs on China.
This crash caused many altcoins to decline by around 60-70%, while also triggering the largest liquidation event in cryptocurrency history.
While the effects of the crash are still lingering, Bitwise CIO Matt Hougan said that the recent crypto crash was a temporary market adjustment and not a structural change.
According to The Block, Matt Hougan stated that the recent flash crash in the cryptocurrency market was a temporary event rather than a major one.
Hougan stated that the upward trend in Bitcoin and altcoins was not disrupted by this collapse, and that the collapse was caused by President Trump's statements about customs duties on Chinese imports and was temporary.
Hougan stated that the decline was due to the liquidation of excessive leverage, adding that there were no major corporate bankruptcies and that investor panic was limited.
Hougan added that professional investors were largely unaffected, suggesting the sell-off had not shaken long-term confidence.
“Investors reacted in the only market still open: Bitcoin and cryptocurrencies.
But cryptocurrencies performed well under this stress. While not perfect, crypto got a passing grade.”
The Bitwise CIO also stated that DeFi protocols such as Uniswap (UNI), Hyperliquid (HYPE), and Aave (AAVE) are operating normally, with only some centralized exchanges encountering temporary issues.
Finally, Hougan also noted that the incident did not impact the market's key growth drivers (improving regulatory environment, increasing institutional participation and competition from traditional finance) and concluded that the medium- to long-term uptrend will resume after this short-term correction.