Bitcoin Could Hit $200K by Tapping Into Gold’s Market, Says Bitwise’s Hougan

Matt Hougan, Chief Investment Officer (CIO) at Bitwise, believes people commonly get it wrong when they talk about the future of the Bitcoin price. In a recent memo he wrote about a question he sometimes gets asked:

“Does the U.S. dollar need to collapse for bitcoin to hit $200,000?”

The simple answer is no, it doesn’t.

Bitcoin Has Made Progress, But Is Not Mature (Yet)

Most holding Bitcoin would agree that it is a store of value. And in the short few years BTC has been around, it’s come a long way. Hougan says Bitcoin is now being “held by 60% of the world’s largest hedge funds, many of the world’s largest asset managers, and even some countries”.

It has survived bulls and bears, scandals and regulatory scrutiny, but most accept it’s “here to stay”.

But the CIO says it hasn’t reached maturity yet, citing a lack of media trust and understanding by many people as well as relatively low institutional adoption – although this is slowly changing with the ongoing adoption of spot Bitcoin exchange-traded funds (ETFs).

Related: Bitcoin Bracing for ‘Potential Turbulence’ as US Election Day Nears and USDT Depegs

So, Hougan argues there is still a lot of room for Bitcoin to grow. Bitcoin could, if it reaches gold’s market cap, be worth around US$900k (AU$1,370k) per coin; but it doesn’t even have to go that high.

At $1.3 trillion, bitcoin is 7% of gold’s $18 trillion market cap. I don’t know if a ‘mature bitcoin’ is half gold’s size, equal to gold, or twice as large as it brings in a new demographic. But I’m confident it’s not 7%.

Matt Hougan, Bitwise CIO

US Debt and the US Dollar

Another well-known argument pro Bitcoin, of course, is the relentless money printing by the United States.

It is true that US debt is out of control, with roughly US$1 trillion (AU$1.52 trillion) being added every 100 days, pushing the total to nearly US$36 trillion (AU$54.8 trillion) and making debt servicing costs unsustainable for the US.

According to the US Treasury, this amount has increased over the past 100 years “from $394 B in 1924 to $35.46 T in 2024”.

While debt is expected to continue to grow for the time being, Hougan believes this cycle of debt and money printing will lead to a substantial expansion of “the size of the store-of-value market, as investors seek a haven from this insanity”.

He added that while it’s hard to predict the size of the store-of-value market, if it triples in the next decade, and Bitcoin just retains its current market share of 7%, well guess what – Bitcoin would also triple.

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But even if the store-of-value market doesn’t grow because debt is under control (gasp!), assuming Bitcoin can increase its market share, it’s still a win.

Imagine bitcoin grows to 25% of the current gold market and nothing else happens. No market expansion, no new use cases, no fears of spiraling debt. Great! In that scenario bitcoin would hit $214,000, roughly four times current levels.

Matt Hougan, Bitwise CIO

Most Likely Scenario? The Bullish Case

And if both happen, the market share of BTC goes up and the store-of-value market grows? Well, that’s a win-win for sure, and according to the CIO, “the most likely scenario”.

Bitcoin does not need the dollar to collapse to hit $200k. It can get there just by capturing a sliver of gold’s existing market. But as governments continue to abuse their currencies and bitcoin continues to mature, it might just get to that level—and well beyond.

Matt Hougan, Bitwise CIO

At the time of writing Bitcoin is trading for US$72,299 (AU$110,069), trying hard to reach a new all-time high. But if we take anything away from Hougan’s analysis, it’s that the new high will come no matter what – it’s just a question of when…