Bitcoin’s Growth Won’t Peak Until It Smashes $500,000: Bitwise CIO

Key Takeaways:

• Bitwise CIO Matthew Hougan believes Bitcoin is still in its early phase until it reaches the $500,000 benchmark.
• Hougan cites the rising demand for store-of-value assets and the pivotal role of institutional adoption in Bitcoin’s long-term growth.
• Bitcoin rose to a new all-time high of $93,523 on November 13.

Bitwise Chief Investment Officer (CIO) Matthew Hougan has set a new standard for the growth of Bitcoin, asserting that the cryptocurrency will remain in its early stages until it achieves the $500,000 mark. 

In a recent note to investors, Hougan stated that while Bitcoin’s recent rally has pushed it above $93,500, a 130% year-to-date gain, the true milestone lies at the half-million-dollar threshold.

Bitwise CIO Highlights Bitcoin’s Position as a Store-of-Value With $500,000 BTC Being The Benchmark for Maturity

In the investor memo, Hougan remains optimistic about Bitcoin’s potential, forecasting that a $100,000 valuation in the short term might be “right around the corner.” 

He reassures investors who feel they’ve “missed the boat,” arguing that Bitcoin’s maturity as a store-of-value asset depends on capturing a larger share of the global $20 trillion store-of-value market currently dominated by gold.

“Gold has ‘made it,’” he noted, referencing how gold enjoys unquestioned legitimacy among institutional investors and central banks. 

He argued that Bitcoin will gain a similar status only with further institutional adoption and regulatory maturation.

Hougan claims that a mature Bitcoin market would feature central banks and pension funds allocating substantial holdings, further establishing the cryptocurrency as a hedge against inflation and economic volatility. 

The investment advisor explained that achieving $500,000 per Bitcoin would equate to roughly half the current store-of-value market, bringing Bitcoin’s market cap closer to gold. 

At press time, Bitcoin’s total market cap was $1.81 trillion, and its price level was near $93,500. 

A jump to $500,000 would require Bitcoin to capture more institutional trust, marking its evolution as a mainstream asset.

The success of Bitcoin spot exchange-traded funds (ETFs) provides additional support for Hougan’s perspective. 

Recent data shows that U.S.-based spot Bitcoin ETFs have attracted over $94 billion in net assets, representing 5.3% of Bitcoin’s market cap. 

Hougan suggests that if institutional interest continues, Bitcoin’s trajectory could ultimately rival gold’s $18 trillion market cap, potentially reaching as high as $1 million.

At $1m, we roughly match the gold market. And I think bitcoin is more useful than gold. https://t.co/WYWyHgHm2O

— Matt Hougan (@Matt_Hougan) November 13, 2024

Bitcoin’s Path to Adoption and Legislative Support

Hougan highlights the need for broader institutional adoption, particularly by central banks, for Bitcoin to realize its potential. 

Central banks currently hold approximately 20% of the world’s gold reserves but less than 2% of global Bitcoin holdings.

Legislative efforts, such as Senator Cynthia Lummis’s proposal for a U.S. Bitcoin reserve, indicate growing interest among policymakers.

WE ARE GOING TO BUILD A STRATEGIC BITCOIN RESERVE 🇺🇸 🇺🇸 🇺🇸

— Senator Cynthia Lummis (@SenLummis) November 6, 2024

Similarly, in 2022, the Gemini co-founders, Tyler and Cameron Winklevoss, once echoed Hougan’s sentiment, citing Bitcoin’s fixed supply and decentralization as essential features. 

They argue that these characteristics position Bitcoin as “gold 2.0,” a durable inflation hedge with advantages over traditional assets like gold, oil, and fiat currencies.