Bitwise's Chief Investment Officer (CIO), Matt Hougan, discussed a $1.6 million target for Bitcoin in his latest analysis.
Matt Hougan, Chief Investment Officer (CIO) of cryptocurrency asset management company Bitwise, argued that Bitcoin (BTC) will be the world’s best-performing major investment asset within the next 10 years. The renowned executive suggested that the price of Bitcoin could reach $1.6 million by 2036, and shared the calculations behind this prediction.
Hougan, appearing on Laura Shin’s Unchained program, offered his assessment of Bitcoin’s long-term potential. He explained that Bitwise’s $1.6 million price target for 2036 is based on two fundamental assumptions, highlighting the growth of the global store of value market and Bitcoin’s increasing share within it.
How Will Bitcoin Reach $1.6 Million?
According to Hougan, the current size of the global store of value market, whose main components are gold and Bitcoin, is approximately $30 trillion. Noting that this market has grown by an average of 13 percent annually over the last 20 years, the executive stated that if similar growth continues, the market size could reach approximately $90 trillion in the next 10 years.
A Bitwise executive argued that Bitcoin’s current market share is around 5 percent and could rise to 25 percent in the next 10 years.
Hougan suggested that Bitcoin could reach its $1.6 million price target if both of these assumptions materialize.
However, there is a mathematical inconsistency in the figures mentioned. Bitcoin’s 25% share of a $90 trillion market corresponds to a market capitalization of $22.5 trillion. This, based on Bitcoin’s maximum supply of 21 million units, translates to a price of approximately $1.07 million. Therefore, different or additional assumptions are needed to explain the $1.6 million target.
More Optimistic Than JPMorgan’s Bitcoin Forecast
Hougan also considered it a significant development that JPMorgan Asset Management included Bitcoin in its long-term capital market outlook.
Hougan noted that JPMorgan expects a compound annual return of approximately 10 percent for Bitcoin, while Bitwise’s forecast is based on a return closer to 30 percent annually.
Highlighting the importance of Bitcoin’s increasing acceptance by traditional financial institutions, the executive cited Wells Fargo, Morgan Stanley, and other major financial institutions’ moves towards the cryptocurrency market as indicators of this shift.
According to Hougan, the inclusion of Bitcoin in investment portfolios by large asset management companies, increasing interest from central banks, and institutional demand for spot Bitcoin ETFs could support the growth of the cryptocurrency’s share in the global store of value market.
Hougan, noting that Bitcoin’s share of the market has increased from approximately 0.1% to 5% in the last 10 years, argued that reaching 25% is possible in the next 10 years.
The renowned executive also stated that he believes Bitcoin hit its bottom in June and that the cryptocurrency market may be at the beginning of a new multi-year bull cycle. However, he acknowledged that quantum computers could pose risks, particularly with regard to older Bitcoin addresses believed to belong to Satoshi Nakamoto.
*This is not investment advice.
