TLDR
- Bitwise CIO Matt Hougan explains that Bitcoin’s valuation is rooted in its competition with gold, valued at over $25 trillion.
- Hougan argues that Bitcoin only needs to capture 10% of the gold market to justify its $2.3 trillion valuation.
- Ethereum and Solana target markets much larger than gold by focusing on stablecoins and tokenized assets.
- Global markets for stocks, bonds, and real estate are worth an estimated $665 trillion, making Ethereum and Solana’s target sector enormous.
- Tether’s growing dominance in non-Western markets positions it for potentially massive future profitability.
Bitwise CIO Matt Hougan recently addressed the large valuations of cryptocurrencies, arguing they are justified when considering the vast markets they aim to disrupt. He explained that Bitcoin’s $2.3 trillion valuation, which raised eyebrows in the crypto community, is based on its competition with gold, valued at over $25 trillion. According to Hougan, understanding the scale of the markets digital assets are targeting makes their valuations more reasonable.
Bitcoin Aims for 10% of Gold Market
In a recent thread, Hougan explained that Bitcoin is competing for a slice of the gold market. He pointed out that gold is currently worth over $25 trillion, providing ample room for Bitcoin to grow. “Imagine you had two startups,” he said, “one trying to disrupt Amazon and the other trying to disrupt gold.” While the Amazon disruptor would need to capture 100% of the market to be worth $2.3 trillion, Bitcoin only needs to take 10% of the gold market.
1/ One of the most common mistakes I see crypto skeptics making these days is underestimating the size of the markets crypto is going after. A thread on why market sizing is everything.
— Matt Hougan (@Matt_Hougan) September 30, 2025
Bitcoin’s valuation has become one of the largest for any financial asset. Hougan argues that this growth stems from Bitcoin’s role as “digital gold” rather than a day-to-day transactional tool. “When you realize Bitcoin is going after gold, suddenly its valuation makes more sense,” Hougan stated. This perspective shifts the understanding of Bitcoin’s market potential and its value proposition.
Solana and Ethereum Target Stablecoins and Tokenized Assets
While Bitcoin competes with gold, Solana and Ethereum aim to disrupt even larger markets. These blockchain platforms target the issuance, trading, and settlement of stablecoins and tokenized assets. Ethereum and Solana are foundational to a rapidly growing sector that connects global payments and capital markets.
The total value of global stocks, bonds, and real estate has been estimated at $665 trillion. In comparison, McKinsey reports that the global payments industry handles $1.8 quadrillion in transactions annually. Ethereum and Solana, valued at $500 billion and $100 billion, respectively, are targeting these colossal markets. This scale is significantly larger than the gold market Bitcoin is competing with.
As the cryptocurrency sector grows, it is positioning itself to capture a piece of some of the world’s largest markets. Ethereum and Solana’s innovations in stablecoins and tokenized assets align them with industries worth trillions of dollars. Their valuations could soar if they continue gaining traction in these sectors.
The Potential and Risks of Tether’s Market Domination
Tether, the world’s leading stablecoin issuer, now has over 400 million users. Its CEO, Paolo Ardoino, claims that Tether is growing by 35 million wallets per quarter. Tether holds over $127 billion in U.S. Treasuries, ranking among the top 20 holders globally, alongside countries such as Saudi Arabia and Germany.
Hougan highlighted Tether’s dominance in non-Western markets as a key factor in its potential profitability. If adoption in emerging markets accelerates, Tether could manage trillions in assets, surpassing the profits of giants like Saudi Aramco. Hougan believes that Tether’s $500 billion valuation might sound extraordinary, but the market it targets is vast.
