TLDR
- Bitwise CIO Matt Hougan said the Bitcoin price could reach $1 million over time.
- He based his projection on Bitcoin gaining a larger share of the global store of value market.
- Hougan estimated the current store of value market stands at nearly $38 trillion.
- He said Bitcoin would need over 50% market share at its current size to reach $1 million.
- Hougan projected the market could grow to $121 trillion within the next decade.
Bitwise Chief Investment Officer Matt Hougan said the Bitcoin price could reach $1 million per coin over time. He compared Bitcoin’s long-term path to gold’s expansion in the global store of value market. Hougan outlined his projections in a Tuesday memo titled “How Bitcoin Gets to $1 Million.”
He argued that many investors misjudge bitcoin because they ignore the growth of the store-of-value market. He said analysts must measure bitcoin against that broader market to assess future value.
Bitcoin price outlook tied to store of value market growth
Hougan estimated today’s store of value market stands just under $38 trillion. He said gold accounts for about $36 trillion, while bitcoin represents roughly $1.4 trillion.
Based on those figures, Bitcoin holds just under 4% of the total market. Hougan said bitcoin would need to exceed 50% market share to reach $1 million at the current market size.
However, he stated that the store of value market has expanded rapidly over the past two decades. When the first U.S. gold ETF launched in 2004, the gold market measured about $2.5 trillion.
Since then, that market has grown to nearly $40 trillion. Hougan attributed that rise to increasing government debt, geopolitical tensions, and loose monetary policy.
He estimated that if the market grows at a similar rate, it could reach $121 trillion within ten years. At that level, Bitcoin would need about 17% market share to hit $1 million.
“As I see it, the base case leads you to much, much higher prices than we have today,” Hougan wrote. He added that projections depend on continued market expansion and bitcoin adoption.
Institutional adoption and long-term projections
Hougan pointed to recent structural changes in the crypto market. He said the United States had no spot Bitcoin ETFs only a few years ago.
Today, Bitcoin ETFs rank among the fastest-growing ETFs on record. Institutions such as the Harvard endowment and the Abu Dhabi sovereign wealth fund now hold exposure.
He also noted that Bitcoin’s long-term volatility has declined. As a result, some professional investors now consider allocations near 5% instead of 1%.
Hougan acknowledged risks tied to slower market growth. He also said bitcoin could fail to gain further share in the store of value space.
Still, he stated that rising concerns about debt and currency debasement could lift demand. He said those pressures could increase interest in alternative assets.
Hougan has shared similar forecasts before this memo. In 2023, he projected that bitcoin could exceed $1 million by 2032.
Last month, he also outlined a scenario where Bitcoin reaches $6.5 million within 20 years. He continues to frame Bitcoin as a competitor to gold in the global store of value market.
