Trillions in institutional money to flow into bitcoin, says Bitwise's Matt Hougan
Bitwise's CIO Matt Hougan predicts that institutional investors could allocate trillions of dollars to bitcoin over the next decade as it becomes a mainstream financial asset.
Intelligence analysis by Llama
Bitwise's CIO Matt Hougan predicts that institutional investors will allocate trillions of dollars to bitcoin over the next decade, lifting its price to roughly $1.3 million per coin by 2035. Hougan estimates that a 1 percent bitcoin allocation from institutions controlling $100 trillion to $200 trillion in assets could support his long-term price target.
Imagine a big pool of money that's controlled by institutions like pension funds and insurance companies. These institutions have a lot of money, and they're starting to invest in bitcoin. This could make the price of bitcoin go up a lot, because more and more people are buying it. It's like when a lot of people start buying a new toy, and the price goes up because everyone wants it.
Analysis
Institutional Investors to Drive Bitcoin Growth Over the Next Decade
Bitwise's Chief Investment Officer Matt Hougan predicts that institutional investors will allocate trillions of dollars to bitcoin over the next decade, lifting its price to roughly $1.3 million per coin by 2035. Hougan estimates that a 1 percent bitcoin allocation from institutions controlling $100 trillion to $200 trillion in assets could support his long-term price target.
Hougan expects future demand to be driven less by corporate buyers like Strategy, and more by large institutions such as pension funds, endowments, insurance companies, and sovereign wealth funds, especially as spot bitcoin ETFs offer easier access.
A 1% Allocation Could Unlock Massive Growth
A 1% allocation to bitcoin would be enough to support Hougan's long-term price targets. Hougan's $1.3 million BTC price target by 2035 rests on bitcoin taking a 25% share of an expanding store-of-value market. Gold's market capitalization has risen from about $2 trillion when gold ETFs launched in 2004 to roughly $30 trillion today, he said. If the market keeps expanding at its historical 13% annual pace for another decade, bitcoin reaching a quarter of it would put each coin at $1.3 million.
Institutional Capital to Lead the Way
Institutions have most of the money in the world, Hougan said. Crypto grew up in retail, which took it from $0 to $2 trillion. But if it wants to get from $2 trillion to $20 trillion, it's going to be institutional capital that leads the way.
Strategy's Role in Bitcoin Demand
Strategy has been one of the biggest buyers of bitcoin for years, becoming the world's largest corporate holder of BTC with 842,138 BTC, even after some modest recent sales. But Hougan believes it will no longer be bitcoin's primary driver of demand. Michael Saylor and team were able to build their bitcoin-buying machine by exploiting two capital-market dislocations, he said: investors once treated its stock as one of the few ways to get public-market crypto exposure, allowing it to sell shares at a premium to the value of its bitcoin holdings; it then used convertible debt and preferred-stock offerings to raise more cash for purchases. Both advantages have weakened. Spot ETFs now offer a direct alternative, making it harder for Strategy to sustain a premium to net asset value, while the company has already issued as much debt as markets were willing to support against its existing capital stack, Hougan said.
The Future of Bitcoin Demand
For long-term investors, Hougan said, the question is not whether bitcoin has found a local bottom. The much better question is if the top is in, he said.
Key points
- Bitwise's CIO Matt Hougan predicts that institutional investors will allocate trillions of dollars to bitcoin over the next decade.
- Hougan estimates that a 1 percent bitcoin allocation from institutions controlling $100 trillion to $200 trillion in assets could support his long-term price target.
- Hougan expects future demand to be driven less by corporate buyers like Strategy, and more by large institutions such as pension funds, endowments, insurance companies, and sovereign wealth funds.
- A 1% allocation to bitcoin would be enough to support Hougan's long-term price targets.
- Hougan's $1.3 million BTC price target by 2035 rests on bitcoin taking a 25% share of an expanding store-of-value market.
If institutional investors continue to drive demand for bitcoin, the price could reach $1.3 million per coin by 2035. This would be a significant increase from the current price, and it could make bitcoin a more attractive investment option for long-term investors.
If institutional investors lose confidence in bitcoin, the price could drop significantly. This could happen if there are regulatory changes that make it harder for institutions to invest in bitcoin, or if there are security concerns that make investors nervous.
