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In an exclusive interview with Yahoo Finance, Matt Hougan, chief investment officer at Bitwise Asset Management, shared his bullish outlook on Bitcoin, predicting significant price appreciation by the end of 2025. “We expect Bitcoin to surpass $200,000 by this time next year. said Hougan, attributing this forecast to three main sources of demand: exchange-traded funds (ETFs), corporate investments and government acquisitions.
Hougan explained: “There are ETFs sucking up Bitcoin, public companies like MicroStrategy are accumulating Bitcoin, and we are now seeing discussions about governments investing in Bitcoin. Ultimately, it comes down to supply and demand: there is too much demand and not enough supply, which drives up prices. »
Asked about the sustainability of such demand, Hougan pointed to the gradual awakening of different investor segments to Bitcoin’s value proposition. “People are waking up to Bitcoin at different rates. We saw retail investors engage first, followed by businesses and financial advisors, and now institutions recognize that Bitcoin belongs in a diversified portfolio,” he explained.
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“Bitcoin is now a global macro asset worth a few billion dollars, and virtually every investor should have some exposure. We still have a large number of investors to recruit, which is why I think we are still at the beginning of this journey. We have many quarters to go,” he added.
How high can the price go if the US buys Bitcoin?
A crucial aspect of Hougan’s predictions hinges on the potential creation of a US Strategic Bitcoin Reserve (SBR). On this, Hougan remarked: “If we get a strategic Bitcoin reserve where the government buys Bitcoin, as Senator Lummis’s bill proposes for the government to buy a million Bitcoin, $200,000 worth of Bitcoin will look picturesque. You’re going to be dealing with three four $500,000 Bitcoins. This is simply too big a story because governments around the world should be doing this. »
Hougan admitted he was initially skeptical of Trump’s suggestions to establish an SBR. “But as the months have gone on, it hasn’t gone away and we continue to see leaders in the Trump administration hint that they are open to it,” Hougan noted. Bitcoin’s CIO still thinks the chances of the U.S. government buying Bitcoin are less than 50%, but “they’re not zero,” he added. “If this happens or we start seeing it happen in other countries, you will see a Bitcoin rip that will make 2024 look pretty tame in comparison.”
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Hougan also highlighted the role of institutional platforms, specifically citing Coinbase as a potential major beneficiary in the evolving crypto landscape. “Coinbase is currently about half the size of Charles Schwab, and we believe it could surpass Schwab in terms of brokerage size,” he noted.
“Coinbase has not had major competitors stepping up to challenge it; there’s sort of a degree of regulatory capture, if you can believe that. As a result, it was able to maintain its high margins at brokerages and then rely on things like stablecoins. (..,.) It would also help if it enters the S&P 500; you see institutions buying it broadly. I think it’s a really unique situation, due to the fact that there was so much regulatory uncertainty – it paved the way for competition and now it’s going to reap those rewards and build a position that really, you know, can -be unsaleable, leading this industry in the US.”
Looking to the broader market, Hougan predicted 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. “This influx will lead to increased Wall Street coverage and institutional investment, paving the way for a strong IPO window in 2025.”
Despite the optimistic outlook, Hougan acknowledged the potential risks that could hamper Bitcoin’s growth. “The biggest risk is that politicians do not keep their promises: if we do not achieve clearer regulation or if we fail to establish a strategic reserve, the expected bull market may not materialize,” he said. he warned. “Regulatory and political factors will be crucial drivers for crypto in 2025, and any setbacks in these areas could pose significant challenges.”
At press time, Bitcoin was trading at $104,212.
Featured image created with DALL.E, chart from TradingView.com
