Matt Hougan from Bitwise forecasts that trillions could flow into bitcoin from institutions in the next decade, potentially raising its price to $1.3 million by 2035.
Bitwise's Chief Investment Officer, Matt Hougan, predicts that institutional investments could inject trillions into bitcoin over the next decade, as the cryptocurrency increasingly gains traction as a mainstream asset.
Potential for Massive Institutional Inflows
Hougan suggests that even a modest 1% allocation from the estimated $100 trillion to $200 trillion in institutional assets could lead to substantial long-term price increases for bitcoin, potentially driving it to a target of $1.3 million per coin by 2035.
He believes that the next wave of demand will primarily stem from larger institutional entities, including pension funds and sovereign wealth funds, especially with the anticipated rise of spot bitcoin ETFs, making it easier for these institutions to invest.
In a recent interview, Hougan highlighted that the initial phase of institutional interest is likely to be driven by financial advisors and family offices, with signs of this trend already visible in recent filings and the actions of major wealth management firms like Morgan Stanley and Wells Fargo.
He foresees a future where larger pools of institutional capital, such as foundations and insurance companies, will start investing in bitcoin, although he cautions that this process may take over a decade. "It’s a process that will take 10+ years," he stated.
Hougan emphasized the significant scale of institutional assets, noting that even a 1% investment in bitcoin could greatly enhance its market price. His $1.3 million projection is based on the assumption that bitcoin will capture a 25% share of the growing market for value storage, drawing a parallel with gold's remarkable market cap increase from about $2 trillion in 2004 to roughly $30 trillion today.
He added, "If bitcoin captures 50% of this market, each coin could be worth around $715,000." Hougan pointed out that while retail investments drove the initial growth of crypto, transitioning to a $20 trillion market will necessitate leadership from institutional capital.
Despite Strategy's substantial bitcoin holdings, which recently made it the largest corporate holder with 842,138 BTC, Hougan believes corporate buying will become less significant in the demand landscape. He noted that Strategy benefited from specific market conditions to build its position but now faces challenges due to the introduction of spot ETFs, which have diminished its ability to maintain a premium on its asset value.
"The easy paths to accumulation have been exhausted," he remarked, suggesting that while Strategy will continue to acquire bitcoin, it will do so more cautiously and in line with market cycles. For long-term investors, Hougan recommended focusing on bitcoin's potential peak rather than its current price level.
