In exclusive an interview with Yahoo Finance, Matt Hougan, Chief Investment Officer at Bitwise Asset Management, shared his bullish outlook on Bitcoin, pointing to significant price appreciation by the end of 2025. “We expect Bitcoin to be above $200,000 by then this next year,” said Hougan, attributing this forecast to three main sources of demand: exchange-traded funds (ETFs)corporate investments, and government construction.
Hougan explained, “There are ETFs that are liquidating Bitcoin, public companies like MicroStrategy are collecting Bitcoin, and now we're seeing talks about governments investing in Bitcoin. Ultimately it comes down to supply and demand – there is too much demand and not enough supply, which drives the price higher.”
When asked about the sustainability of that demand, Hougan emphasized the gradual awakening of various investment segments to Bitcoin's value proposition. “People just wake up to Bitcoin at different rates. We have seen retail investors get involved first, followed by companies and financial advisors, and now institutions are recognizing that Bitcoin is in a diversified portfolio,” he explained.
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“Bitcoin is now a global macro asset worth a few trillion dollars, and almost every investor should have some exposure. We still have a large number of investors to go, which is why I believe we are still early in this journey. We have many quarters to go,” he said.
How high can the price go if the US buys Bitcoin?
An important part of Hougan's prediction hinges on the establishment of the US Strategic Bitcoin Reserve (SBR). Addressing this, Hougan said, “If we get a strategic Bitcoin reserve where the government buys Bitcoin, as proposed in Senator Lummis' bill for the government to buy a million Bitcoin, $200,000 Bitcoin to look quaint. You are going to be looking at three four $500,000 Bitcoin. It's just too big a story because governments all over the world had to do it.”
Hougan admitted that he was initially skeptical of Trump's proposals to a SBR. “But over the months, it hasn't really gone away we continue to see leaders in the Trump Administration suggesting that they are open to it,” Hougan said. The Bitcoin CIO still believes that the probability of the US government buying Bitcoin is less than 50%, but “it's not zero,” he said. “If it happens or we start to see it happen in other countries, you're going to see a climb up in Bitcoin that makes 2024 look pretty docile by comparison.”
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Hougan also highlighted the role of institutional platforms, citing Coinbase in particular as a potential major beneficiary in the changing crypto landscape. “Coinbase is currently about half the size of Charles Schwab, and we think it could surpass Schwab in brokerage size,” he said.
“Coinbase has had no major competitors to challenge it; it's kind of got a degree of regulatory capture, if you can believe it. As a result, he has been able to maintain his high margins in brokerage and then cover things like stable. (..,.) It will also help if it gets into the S&P 500; you can see institutions buying it generally. I think it's a fantastic situation driven by the fact that there was so much regulatory uncertainty – it cleared the way for competitive fat and now it's going to reap those benefits and building a really, you know, maybe unsellable position leading this business in the US.”
Looking ahead to the broader market, Hougan expected an influx of crypto-related companies entering public markets. “We can expect companies like Kraken, Anchorage, and Chainalysis to go public, normalizing the industry,” he said. “This flow will result in increased Wall Street coverage and institutional investment.” , setting the stage for a strong IPO window in 2025.”
Despite the optimistic view, Hougan recognized risks that could hinder the growth of Bitcoin. “The biggest risk is that politicians don't keep their promises – if we don't achieve regulatory clarity or establish a strategic reserve, expected bull market it might not come true,” he said. “Regulatory and political factors are critical drivers for crypto in 2025, and any problems in these areas could pose significant challenges. “
At press time, Bitcoin was trading at $104,212.
Featured image created by DALL.E, a chart from TradingView.com
