Bitcoin’s crashes often spark 190% rebounds, making Bitwise more bullish than ever as market chaos signals a prime setup for explosive upside.

Bitwise CIO Says Bitcoin’s ‘Dip Then Rip’ Pattern Is Flashing a Bullish 190% Setup

Matt Hougan, chief investment officer at asset management firm Bitwise, used his March 17 memo to explain why bitcoin tends to drop in moments of financial stress—even though it’s considered a hedge. Drawing from research by his colleague Juan Leon, Hougan noted that when the S&P 500 falls by more than 2% in a single day, bitcoin tends to perform even worse, declining about 2.6% on average.

“But Juan’s research showed something else: If you had stayed invested—or bought more after the pullback—you would have done very well. On average, in the year following these sharp pullbacks, bitcoin rose a shocking 190%, dramatically outperforming every other asset,” Hougan said. Describing the trend, he stated:

I call this pattern ‘Dip Then Rip,’ and historically it’s one of the most consistent patterns in crypto.

Hougan suggested this behavior stems from how investors determine asset values using future expectations and risk assumptions—principles borrowed from discounted cash flow analysis. While bitcoin lacks cash flows, he applied a similar model based on projected value and discount rates.

He explained:

At Bitwise, for instance, we think bitcoin will be worth $1 million in 2029.

“So, you might ask, what do we think it’s worth today? It depends on the discount factor—that is, the risk you assign it. If you discount back at 50% a year, the net present value is $218,604. If you use a 75% discount rate, the net present value is $122,633,” the executive detailed.

Hougan emphasized that geopolitical disruptions like tariffs can temporarily elevate risk perception, raising the discount rate and lowering bitcoin’s near-term valuation—even if the long-term forecast improves.

To illustrate the latest drop in prices triggered by tariff fears, Hougan cited a comment from crypto services firm NYDIG: “What does bitcoin have to do with tariff wars? Nothing, other than it’s a highly liquid, globally available asset that trades 24/7. If anything, bitcoin stands to benefit from the rise in global entropy, the political and economic disorder created by the administration.” For Hougan, such market turbulence may present a strategic opening. He concluded:

If you’re a long-term investor, these short-term spikes in the discount factor are a chance to get in at a discount. From where I sit, I’ve never been more bullish.