This article is available in Spanish.
On an exclusive interview Joining Yahoo Finance, Matt Hougan, Chief Investment Officer at Bitwise Asset Management, shared his optimistic view on Bitcoin, predicting a significant price appreciation by the end of 2025. “We expect Bitcoin to rise above $200,000 this time next year,” Hougan said. , attributing this forecast to three primary sources of demand: exchange-traded funds (ETFs), corporate investment, and government takeovers.
Hougan explained: “There are ETFs sucking up Bitcoin, public companies like MicroStrategy accumulating Bitcoin, and now we’re seeing discussions about governments investing in Bitcoin. Ultimately it comes down to supply and demand: there is too much demand and too little supply, which drives the price up.”
When asked about the sustainability of such demand, Hougan highlighted the gradual awakening of various investor segments to Bitcoin’s value proposition. “People are waking up to Bitcoin at different rates. We’ve seen retail investors engage first, followed by corporations and financial advisors, and now institutions are recognizing that Bitcoin belongs in a diversified portfolio,” he explains.
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“Bitcoin is now a global macro asset worth several trillion dollars, and virtually every investor should have some exposure. We still have a lot of investors to go, and that’s why I think we’re just at the beginning of this journey. We still have many quarters to go,” he added.
How high can the price go if the US buys Bitcoin?
A crucial aspect of Hougan’s prediction hinges on the possible creation of a US Strategic Bitcoin Reserve (SBR). To this, Hougan noted: “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 will look strange. You’re going to be looking at three four $500,000 Bitcoin. It’s just too big of a story because governments around the world should be doing it.”
Hougan admitted that he was at first skeptical of Trump’s suggestions to create an SBR. “But it hasn’t gone away over the months. We continue to see leaders in the Trump administration suggesting they are open to it,” Hougan noted. The Bitcoin CIO still thinks the chance of the US government buying Bitcoin is less than 50%, but “it’s not zero,” he added. “If it happens, or if we start to see it happen in other countries, you’re going to see a rift in Bitcoin that makes 2024 look pretty docel by comparison.”
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Hougan also highlighted the role of institutional platforms, specifically mentioning Coinbase as a potential major beneficiary in the evolving crypto landscape. “Coinbase is currently about half the size of Charles Schwab, and we think it could surpass Schwab in terms of brokerage size,” he noted.
“Coinbase hasn’t had any major competitors to challenge it; it has had a certain amount of oversight, if you can believe it. As a result, it has been able to maintain its high margins with brokers and then expand things like stablecoins. [..,.] It also helps if it ends up in the S&P 500; you see that institutions are broadly buying it. I think it’s a really unique situation, driven by the fact that there was so much regulatory uncertainty. It’s cleared the path of competitive grease and now it’s going to reap those rewards and build a really, you know, perhaps unmarketable position as the leader of this sector in the ONS.”
Looking ahead to the broader market, Hougan expected an influx of crypto-related companies entering the public markets. “We can expect companies like Kraken, Anchorage and Chainalysis to go public, further normalizing the industry,” he said. “These inflows will lead to greater Wall Street coverage and institutional investment, paving the way for a robust IPO window in 2025.”
Despite the optimistic outlook, Hougan acknowledged potential risks that could hinder Bitcoin’s growth. “The biggest risk is that politicians do not keep their promises. “If we do not achieve regulatory clarity or establish a strategic reserve, the expected bull market may not materialize,” he warned. “Regulatory and political factors are critical drivers for crypto in 2025, and any setbacks in these areas could pose significant challenges.”
At the time of writing, Bitcoin was trading at $104,212.
Featured image created with DALL.E, chart from TradingView.com