There is an interesting debate happening in the market about what it really means for Bitcoin to be in a decline. Matt Hougan, senior investor at Bitwise, joined the discussion to defend the asset against a wave of skepticism that has gained strength recently.

The whole thing started when articles questioned whether Bitcoin is really useful for anything. With nearly a 50% drop from the all-time high close to $126,000, many people began to doubt whether this asset is truly a good store of value. There was even a renowned trader saying that Bitcoin is not digital gold and that it doesn't work as an inflation hedge.

But Hougan brought up an argument that makes a lot of sense. He argues that Bitcoin is in an adolescence phase, that uncomfortable stage where the asset doesn't fit into any well-defined category. The idea is that you can't go from 100% speculation to 0% speculation overnight. You have to go through each gradient along the way.

To support this, he drew a very interesting historical parallel. After the US left the gold standard in 1971, the price of gold became completely volatile. It rose 73% in one year, fell 24% the next. Two years later, it rose 121%, then fell 33%. If someone had asked in 1975 whether gold was a good store of value, the answer would be no, based on the 24% decline that had occurred. But we know how history ended.

The point is that that 1971 initial gold standard set value was pure speculation. Over time, the metal matured, prices stabilized, and today it is a respected asset. Hougan believes that Bitcoin is following exactly the same path. First comes wild volatility, then gradual stabilization.

It’s a perspective that significantly changes how we interpret the price drops we’re seeing now. Instead of being a sign of failure, it could just be a necessary part of the journey for the asset to mature. Of course, this is no guarantee of anything, but the historical precedent is quite interesting to consider.

The market is sometimes too anxious. It wants everything to work perfectly from the start. But new monetary assets don’t operate that way. They need to go through this uncomfortable phase before reaching a stable place. Bitcoin might be exactly there right now.