Bitcoin continues to cement its status as one of the most exciting investments of the past decade. In a year where it has reached all-time highs, Bitwise Asset Management Chief Investment Officer Matt Hougan sees an even brighter future for the cryptocurrency.
According to Hougan, Bitcoin could climb to $200,000 by next year. But what is driving this prediction and what role would the creation of a “strategic backstop” for Bitcoin by the US play?
Bitcoin and global adoption
Hougan points out that Bitcoin’s growth is a process of gradual adoption. Retail investors were the first to get involved, and after them we saw companies and financial advisors start to get involved. Now it’s the turn of institutions, who are recognizing Bitcoin’s place as a viable and, above all, necessary asset within modern portfolios.
“When people and organizations realize that Bitcoin is not going away, that it has a legitimate role in the global economy, they need to act,” Hougan noted. This has created a cascade of adoption, with players like BlackRock now recommending close to 2% of total portfolios be held in Bitcoin . This shift in perspective from big global players not only validates the cryptocurrency’s trajectory, but also accelerates its adoption.
Education and market participation
Bitcoin’s growth is not just about capital, but also about knowledge. Hougan mentions that a key factor behind this wave of adoption is “educational breakthroughs” that help demystify how this cryptocurrency works. Lack of understanding has historically been a major obstacle, but that barrier is disappearing.
Education about Bitcoin’s advantages, such as its ability to act as a store of value and its decentralization, is leading investors to move away from zero exposure (“going zero”) and start including it in their portfolios. This trend is not only limited to individuals, but also to corporate giants and financial institutions.
What is a “strategic backing” of Bitcoin and why would it boost its price?
One of the most interesting aspects Hougan mentions is the possibility of the United States adopting a Bitcoin-based strategic backstop. While the concept has not yet been widely discussed in Washington, this idea could represent a significant boost for the cryptocurrency's price.
Essentially, a strategic backing would involve the US government acquiring and reserving Bitcoin as part of its economic strategy, in a similar way to how other countries manage gold reserves.
This would have massive implications for the market. Not only would it fully legitimize cryptocurrencies from a government perspective, but it could also boost demand and, therefore, price. According to Hougan, such an initiative could position Bitcoin at unprecedented valuation levels.
ETFs and companies that lead the market
Bitwise Asset Management, the firm led by Hougan, has been a pioneer in structuring exchange-traded funds (ETFs) based on Bitcoin and other cryptocurrencies, such as BITB, BITC and BITW . These products are designed to provide access to investors seeking exposure to the crypto market without the need to directly manage the digital assets.
Furthermore, Hougan expressed optimism about the growth of crypto giants like Coinbase Global (COIN), stating that platforms like these have a bright future aligned with the growth of Bitcoin and the widespread adoption of cryptocurrencies.
The future of Bitcoin?
Hougan’s projected path to $200,000 is not a simple bet, but a vision based on visible facts. Growing adoption by institutions, validation by giants like BlackRock, educational advancements, and the possibility of the US strategically backing Bitcoin, paint a bullish picture.
In a world still adjusting to new financial technologies, Bitcoin is proving to be more than just a fad. It's a paradigm shift that could transform markets, governments and investments globally. Is the world ready for that shift? It seems some already are.