Bitwise CIO: Farewell to 1% Allocation, Bitcoin Is Experiencing Its "IPO Moment"

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

Original Author: Matt Hougan, Chief Investment Officer at Bitwise

Original Translation: Saoirse, Foresight News

Bitcoin's sideways consolidation precisely marks the arrival of its "IPO moment." Why does this mean a higher proportion of asset allocation? Here’s the answer.

In Jordi Visser’s latest article, he explores a key question: Despite a constant stream of positive news—strong ETF inflows, significant regulatory progress, and sustained institutional demand—Bitcoin trading remains frustratingly flat.

Visser believes Bitcoin is undergoing a "silent IPO," transforming from a "whimsical concept" into a "mainstream success story." He points out that, typically, when stocks go through this transformation, they tend to consolidate sideways for 6 to 18 months before entering an upward trend.

Take Facebook (now Meta) as an example. On May 12, 2012, Facebook went public at $38 per share. For more than a year afterward, its stock price hovered sideways or declined, taking a full 15 months before breaking above its IPO price of $38. Google and other high-profile tech startups showed similar trends in their early days as public companies.

Visser states that sideways consolidation does not necessarily indicate a problem with the underlying asset itself. This often occurs because founders and early employees choose to "cash out." Those who took bold risks when the startup was highly uncertain have now reaped hundredfold returns and naturally want to secure their gains. The process of insiders selling and institutional investors taking over takes time—only when this transfer of equity (or assets) reaches a certain balance does the asset’s price resume its upward trajectory.

Visser points out that Bitcoin’s current situation is very similar. Early believers who bought in at $1, $10, $100, or even $1,000 now hold generational wealth. Today, Bitcoin has "entered the mainstream"—ETFs are trading on the New York Stock Exchange, large corporations are adding it to their reserves, and sovereign wealth funds are entering the market—giving these early investors the opportunity to realize their gains.

This is worth celebrating! Their patience has finally paid off. Five years ago, if someone sold $1.1 billions worth of Bitcoin, it could have thrown the entire market into chaos; but now, the market has a sufficiently diverse group of buyers and ample trading volume to absorb such large transactions more smoothly.

It should be noted that on-chain data interpretations of "who is selling" are not unified, so Visser’s analysis is only one of the factors currently influencing market trends. But this factor is crucial, and considering its implications for the future market is undoubtedly valuable.

Here are two core conclusions I’ve distilled from this article.

Conclusion One: The Long-Term Outlook Is Extremely Optimistic

Many crypto investors feel discouraged after reading Visser’s article: "Early whales are selling Bitcoin to institutions! Do they know something we don’t?"

This interpretation is completely wrong.

Early investors selling does not mean the "end of the asset’s lifecycle"; it simply marks the asset entering a new stage.

Again, take Facebook as an example. Yes, its stock price consolidated below $38 for a year after its IPO, but today its price is $637, up 1,576% from the IPO price. If I could go back to 2012, I’d buy all the Facebook stock I could at $38 per share.

Of course, if you had invested in Facebook during its Series A round, the returns would have been even higher—but the risks at that stage were much greater than after the IPO.

Bitcoin is in a similar position today. In the future, the likelihood of Bitcoin achieving hundredfold returns in a single year will decrease, but once the "asset distribution phase" ends, there is still significant upside potential. As Bitwise pointed out in its "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 want to add one more point: The market after early whales sell Bitcoin is fundamentally different from the market after a company’s IPO. After an IPO, a company must continue to grow to support its stock price—Facebook couldn’t jump from $38 to $637 overnight because it didn’t have enough revenue and profit to justify such a rise; it had to expand revenue, develop new businesses, and push into mobile, all of which carried risks.

But Bitcoin is different. Once early whales have sold, Bitcoin doesn’t need to "do anything"—to grow from its current $2.5 trillion market cap to gold’s $25 trillion market cap, the only requirement is "widespread recognition."

I’m not saying this process will happen overnight, but it could very well be faster than Facebook’s stock price growth cycle.

From a long-term perspective, Bitcoin’s sideways consolidation is actually a "godsend." In my view, this is a great opportunity to accumulate before Bitcoin resumes its upward trend.

Conclusion Two: The Era of 1% Bitcoin Allocations Is Over

As Visser notes in his article, companies that have completed their IPOs are far less risky than those in the startup phase. Their equity is more widely distributed, they face stricter regulatory scrutiny, and they have more opportunities for business diversification. Investing in Facebook after its IPO is much less risky than investing in a startup run out of a party house in Palo Alto by college dropouts.

Bitcoin is in a similar situation today. As Bitcoin holders shift from "early enthusiasts" to "institutional investors," and as its technology matures, Bitcoin no longer faces the "existential risks" it did a decade ago—it has become a mature asset class. This is clearly reflected in Bitcoin’s volatility—since Bitcoin ETFs began trading in January 2024, its volatility has dropped significantly.

Bitcoin Historical Volatility

Data source: Bitwise Asset Management. Data range: January 1, 2013 to September 30, 2025.

This change brings an important insight for investors: In the future, Bitcoin’s returns may decline slightly, but its volatility will drop significantly. As an asset allocator, faced with this change, my choice is not to "sell"—after all, we predict that over the next decade, Bitcoin will be one of the best-performing major asset classes globally—on the contrary, I would choose to "increase my holdings."

In other words, lower volatility means "it’s less risky to hold more of this asset."

Visser’s article also confirms a phenomenon we’ve already observed: Over the past few months, Bitwise has held hundreds of meetings with financial advisors, institutions, and other professional investors, and a clear trend has emerged—the era of 1% Bitcoin allocations is over. More and more investors now believe that a 5% allocation should be the "starting point."

Bitcoin is experiencing its "IPO moment." If history is any guide, we should embrace this new era by "increasing our holdings."

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