Bitcoin may start to lose its reputation as a volatile asset.
According to Matt Hougan of Bitwise Asset Management, the cryptocurrency's wild price swings have subsided significantly over the past decade.
“What's driving the bitcoin market right now is a simple imbalance between supply and demand,” the company's chief investment officer told CNBC's “ETF Edge” on Monday. “We have a huge new source of demand for these ETFs, and we have a supply that is inelastic.”
On January 11, the first exchange-traded bitcoin funds began trading. Since then, the asset has risen more than 50%. Bitcoin reached an all-time high of just under $74,000 this week.
Still, Hougan acknowledges that this may not be true for everyone.
“It moves around a lot. Some people find it hard to understand,” Hougan said.
While Bitwise bets on the growth of bitcoin, ProShares has an ETF that wants to profit from losses Short Bitcoin Strategy ETF. It's down 42% so far this year and down almost 70% over the past year.
“To quote Mark Twain, 'Reports of our deaths have been greatly exaggerated,'” Simeon Hyman of ProShares told CNBC. “We are happy to be here and we think we are an important alternative.”
Hyman, the firm's global investment strategist, notes that bitcoin's historic strength has endured well beyond the launch of spot bitcoin ETFs.
“This is the month of the anniversary of the collapse of crypto-linked financial institutions. Last year, bitcoin also went up,” Hyman said. “I think there are longer-term people starting to focus on asset allocation and diversification.”
Hyman's ProShares also operates a long bitcoin ETF: ProShares Bitcoin Strategy ETF. It's up 55% since Jan. 1 and 111% over the past year.
As of Friday evening, bitcoin is up 180% over the past 12 months.