Bitwise CIO Declares Ethereum Essential as Network Gas Prices Hit Monthly Highs

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.