Bitcoin could attract trillions of dollars from institutional investors over the next decade as the cryptocurrency becomes a mainstream portfolio asset, Bitwise Chief Investment Officer, Matt Hougan, said, arguing that even a small allocation from the world’s largest pools of capital could materially reshape the market.
Hougan estimates that global institutions control between $100 trillion and $200 trillion in assets. If just 1% of that capital were allocated to Bitcoin, the resulting investment would amount to between $1 trillion and $2 trillion.
The Calculation is Straightforward:
- Global institutional assets: $100 trillion-$200 trillion
- Assumed Bitcoin allocation: 1%
- Potential Bitcoin inflows: $1 trillion-$2 trillion
Hougan said that level of institutional demand would support his long-term Bitcoin outlook, although he expects the shift to take more than a decade.
“It’s a process that will take 10+ years,” Hougan said.
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His $1.3 million Bitcoin price target for 2035 is based on a separate store-of-value calculation.
Hougan argues that Bitcoin will increasingly compete with gold and other assets used to preserve wealth. He estimates the global store-of-value market could continue expanding at its historical rate of about 13% a year.
Gold’s market capitalization has grown from about $2 trillion in 2004, when gold exchange-traded funds launched, to roughly $30 trillion today, according to Hougan.
If that market grows at 13% annually for another decade, its value would rise substantially. Bitcoin capturing 25% of that expanded market would, in Hougan’s model, put the value of each Bitcoin at about $1.3 million by 2035.
