TLDR
- Matt Hougan, Bitwise’s Chief Investment Officer, projects Bitcoin could achieve $1 million valuation
- The store-of-value market globally is valued at approximately $38 trillion today
- Bitcoin’s current market share stands below 4%
- Reaching $1 million requires only 17% of an estimated $121 trillion future market
- The case is strengthened by spot Bitcoin ETF adoption and institutional investment flows
In a recently published memo called “How Bitcoin Gets to $1 Million,” Bitwise’s Chief Investment Officer Matt Hougan has doubled down on his prediction that Bitcoin could eventually trade at $1 million per coin.
His thesis centers on the worldwide store-of-value market — the collection of assets individuals and institutions use to safeguard wealth across time. Gold dominates this category.
Currently, the store-of-value market sits just below $38 trillion in total value. Gold commands approximately $36 trillion of that figure, whereas Bitcoin holds around $1.4 trillion, representing under 4% of the aggregate.
According to Hougan, many market participants fail to appreciate Bitcoin’s potential because they overlook the rapid expansion of the store-of-value sector itself. When the inaugural gold ETF debuted in the United States back in 2004, gold’s market capitalization stood at roughly $2.5 trillion. Today, it has ballooned to nearly $40 trillion — translating to approximately 13% compound annual growth.
Hougan attributes this expansion to escalating sovereign debt levels, heightened geopolitical instability, and accommodative monetary policies worldwide.
How Bitcoin Gets to $1 Million
Should the store-of-value sector maintain comparable growth rates, Hougan projects it could swell to $121 trillion over the next ten years. Under that scenario, Bitcoin would require merely 17% market penetration to achieve $1 million per coin.
In today’s market conditions, Bitcoin would need to command over 50% to reach that price point. However, Hougan’s projection doesn’t depend on Bitcoin achieving majority dominance — rather, it relies on the overall market expanding substantially.
He references recent market evolution as validation that momentum is building favorably. Just a few years back, U.S. investors had no access to spot Bitcoin ETFs. Today, these products rank among the most rapidly adopted ETF launches ever recorded.
Major institutional players have begun allocating capital as well. Notable examples include Harvard University’s endowment and Abu Dhabi’s sovereign wealth fund, both of which have incorporated Bitcoin into their investment portfolios.
Bitcoin’s Volatility Has Been Declining
Hougan further observes that Bitcoin’s long-term price volatility has been trending downward. Consequently, institutional portfolio managers are now considering allocations around 5%, a significant increase from the 1% positions recommended in earlier years.
While bullish, Hougan recognizes potential headwinds. The store-of-value market’s growth rate could decelerate, and Bitcoin’s market share gains aren’t guaranteed.
He also suggested his forecasts might ultimately prove “too conservative” if anxieties surrounding sovereign debt burdens and currency devaluation intensify.
This isn’t Hougan’s first foray into such predictions. In a 2023 publication, he suggested Bitcoin could surpass $1 million by 2032. More recently, he indicated it might climb to $6.5 million within two decades.
Based on Hougan’s most recent calculations, Bitcoin currently captures less than 4% of the global store-of-value market.
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