TL;DR
- Bitwise Investments CIO Matt Hougan names Bitcoin and Ethereum as the “two big horses” every crypto investor should hold
- Ethereum’s median gas price hit a one-month high of 23.128 GWEI, signaling surging network demand
- ETH has rallied over 40% in four weeks, trading near $1,680 as of February 4, 2023
- Bitcoin and Ethereum whales moved a combined $743 million in just three large transactions
- Exchange outflows for ETH continue to outpace inflows, suggesting bullish accumulation pressure
Two of the most prominent themes in the cryptocurrency market converged on February 4, 2023: growing institutional conviction in the space and on-chain evidence that Ethereum’s network is experiencing a genuine usage surge. Together, these developments paint a picture of a market that is finding its footing after a punishing 2022.
Bitwise CIO Doubles Down on Bitcoin and Ethereum
Matt Hougan, the chief investment officer of Bitwise Investments — a crypto fund managing approximately $1.3 billion in assets — laid out his bullish case for the market’s two largest cryptocurrencies in a Stansberry Research interview published on February 4. Hougan did not mince words about where institutional capital is heading.
“I think Bitcoin is still a very critical crypto asset, the asset institutions feel most comfortable holding,” Hougan explained. He described bitcoin as a “hedge against monetary policy errors,” noting the risk of a potential second leg of inflation in Europe that could complicate the economic outlook in the United States. “I think you’re going to see continual flows into that space,” he added.
But it was Hougan’s comments on Ethereum that carried the strongest conviction. “We’re probably most excited about Ethereum,” he said, before offering a telling comparison: “A few years ago you could buy Bitcoin and have your crypto exposure and be 80% right. I think today you need to have at least Bitcoin and Ethereum, the two big horses to have in your portfolio.”
The remarks from one of the industry’s most influential asset managers underscore a broader shift in institutional thinking. Ethereum’s transition to proof-of-stake, completed in September 2022, has reshaped the narrative around the network, positioning it as more than just a speculative asset. The combination of staking yields, deflationary token mechanics, and a thriving decentralized application ecosystem has attracted attention from allocators who previously viewed crypto through a bitcoin-only lens.
Ethereum Network Demand Surges
On-chain data from Glassnode corroborates the bullish sentiment. On February 4, the blockchain analytics firm reported that Ethereum’s median gas price, measured as a 7-day moving average, reached a one-month high of 23.128 GWEI. The previous monthly high of 23.097 GWEI had been observed on January 19. This increase in gas prices reflects growing congestion on the Ethereum network — a direct consequence of rising demand for block space.
The surge in gas prices comes amid a strong recovery in on-chain activity since the start of 2023. Ethereum’s price action has been particularly impressive, with the cryptocurrency pulling off a 40% gain in just four weeks to trade around $1,680 on February 4. At $1,667 per CoinMarketCap data, ETH’s price is testing a resistance zone that has proven difficult to break through in recent sessions.
Exchange Flows Favor the Bulls
Perhaps the most telling signal comes from ETH exchange flow data. According to Glassnode, exchange outflows have remained consistently higher than inflows over the past several weeks. This pattern is widely interpreted as a bullish indicator, as it suggests investors are moving their Ethereum off exchanges and into private wallets — typically a sign of long-term holding intent rather than an appetite for selling.
The outflow pattern held even as network growth and transaction counts experienced a temporary dip in the 24 hours leading up to February 4, which some analysts attributed to market uncertainty around upcoming Federal Reserve economic data and FOMC minutes. Despite this brief slowdown in on-chain metrics, ETH’s price remained in positive territory for the week, supported by the underlying accumulation trend.
Whale Activity Signals Confidence
Adding to the bullish picture, blockchain tracking service Whale Alert reported a series of massive cryptocurrency transfers on February 4. Bitcoin and Ethereum whales collectively moved approximately $743 million in just three transactions. One of the largest individual transfers involved a bitcoin wallet moving $123 million worth of BTC. Such large-scale movement of digital assets, particularly when not immediately followed by exchange deposits, can indicate over-the-counter transactions or institutional repositioning rather than imminent selling pressure.
Why This Matters
The convergence of institutional endorsement, rising on-chain activity, and favorable exchange flow dynamics creates a compelling narrative for Ethereum and the broader crypto market in early 2023. When a CIO of a billion-dollar fund publicly declares that investors need both Bitcoin and Ethereum, it reflects a maturation of institutional thinking that goes beyond the “digital gold” narrative. Combined with the network’s own metrics showing genuine usage growth — not just speculative positioning — the data suggests that Ethereum’s post-Merge era is beginning to attract the kind of sustained demand that could support further price appreciation.
However, the market remains in a delicate position. ETH is trading near key resistance levels, and the temporary dip in network activity serves as a reminder that the macroeconomic backdrop — including inflation data and central bank policy decisions — continues to exert significant influence over crypto markets. The bulls have the upper hand for now, but the battle is far from won.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk, and readers should conduct their own research before making investment decisions.
23 gwei gas and people celebrating demand. in 2021 that was considered a slow day. ethereum usage narrative needs more than one spike to be convincing
Liang W. 23 gwei being dismissed as a spike is wild. base fee was elevated for 3+ weeks straight, thats not a mint event thats sustained usage
Liang W. calling 23 gwei a spike is a 2021 brain. after the merge base fee elevated to 15+ for a week straight means genuine usage not a mint event
hougan calling ETH essential at $1680 aged incredibly well. gas at 23 gwei feels like a dream looking at current numbers
whales moving $743M in 3 txs and exchange outflows accelerating. thats not retail FOMO thats institutional repositioning
$743M in whale movements in 3 txs and the market barely blinked. thats when you know accumulation is real and not just noise
Hougan specifically said hold both not pick one. the way people twist that into flippening or btc only is exhausting
hougan saying hold both is just asset manager speak for buy my fund. not saying hes wrong but lets call it what it is
wei_dai_fan calling it asset manager speak is unfair. hougan has been consistently right on ETH since 2020. if you held both you outperformed 95% of altcoin traders
hougan_maxi_ holding both BTC and ETH outperformed 95% of traders because it removed decision fatigue. simple beats clever in every cycle
wei_dai_fan hougan manages a crypto fund so of course he says hold both. but he was right about ETH in 2020 when nobody else was, credit where due
wei_dai_fan Hougan managing a crypto fund and saying hold both is literally his job description. the outflow data was bullish regardless of his sales pitch tho
Hougan calling ETH essential at the same time gas hit 23 gwei is either perfect timing or cherry picked data. either way the outflow numbers dont lie
23 gwei median gas after months of sub-10 is either a usage surge or just another nft mint frenzy. ill believe the usage narrative when base fee stays elevated for more than a week
the eth staking withdrawal queue was still backed up around then. outflows plus staking pressure means real demand, not just nft minting
staking withdrawal queue being backed up while outflows kept growing is the most bullish signal in this entire article. people werent selling they were committing
exchange outflows outpacing inflows while whales move $743M in 3 transactions. someone is positioning for something big
$743M in 3 txs is just whales being whales. the exchange outflow data is the real signal here
gas stayed above 20 for weeks after this though. was not just an nft mint
ETH exchange outflows outpacing inflows for weeks while whales moved 743M OTC. that was the accumulation phase before the march breakout, the chain was screaming it
outflow_max_ the staking withdrawal queue being backed up at the same time was the bullish tell. people were committing to lock-up not selling into the pump
outflow_max_ the withdrawal queue being backed up while outflows kept growing was the clearest accumulation signal. people were locking up ETH not selling into the 40% pump
Hougan managing a billion in crypto assets and calling ETH essential was a signal whether you like him or not. institutional flow data confirmed it
743M in 3 whale transactions was OTC desk positioning not market buys. interpreting whale transfers as bullish is how retail gets dumped on