Bitwise Chief Investment Officer (CIO) Matt Hougan has stated that the flagship cryptocurrency could go as high as $200,000 without the dollar collapsing.
Matt Hougan stated that Bitcoin draws its value from two independent forces. Bitcoin’s role as a digital store of value and inflationary pressure on Fiat currencies.
He argued that most times analysts neglect Bitcoin’s broader potential while assuming that its growth depends on a weakening dollar.
Hougan argued that the first driver of Bitcoin’s astronomical growth is the asset’s position as a digital equivalent to gold. Despite Bitcoin representing only 7% of gold’s estimated $18 trillion market, Bitcoin market cap has the potential to grow significantly as it gains acceptance among investors.
The Bitwise CIO argued that Bitcoin’s price could rise even if it captured just 25% of gold’s market pushing it well past $200,000.
The second force that will drive Bitcoins expansive growth according to Hougan stems from the possible debasement of fiat currencies, particularly the dollar, which could drive more investors toward assets like Bitcoin as a hedge. Assets like Bitcoin are increasingly seen as a hedge against inflation.
With the US federal debt sitting at $36 trillion, Hougan sees growing fiscal pressures forcing investors to seek an alternative store of values benefitting assets like Bitcoin.
Matt Hougan expanded his thought process with an X thread to his community relaying a conversation he had with a financial advisor as regards the subject topic.
“ 1/ A financial advisor asked me a great question over dinner last week: Does the U.S. dollar need to collapse for bitcoin to hit $200,000? The answer is “no.” Here’s why…
2/ When you invest in Bitcoin, you’re making two bets at once: i) Bitcoin will succeed in establishing itself as a new “store of value” asset ii) Governments will abuse fiat currencies and increase demand for “store of value” assets.
3/ The two arguments are separate. Argument 1: Bitcoin is ~7% of gold’s $18tr market cap today. If it “matures” and becomes 50% the size of gold, every bitcoin is worth >$400k. Argument 2: The “store of value” market is growing because governments are abusing their currencies.
4/ Importantly, these arguments compound. If bitcoin matures and the store of value market doubles, you quickly get to seven figures. FWIW, I think this is the most likely scenario eventually.
5/ So, no, the dollar doesn’t need to collapse for bitcoin to hit $200k. All you need is Bitcoin to continue on its current path of maturing as an institutional asset. But it’s increasingly looking like both parts of the argument will come true. That’s why Bitcoin is surging toward all-time highs “Matt Hougan tweeted
Besides Matt Horgan’s fundamental analysis of Bitcoin’s Price surge, other prediction models support the intrinsic growth of Bitcoin over time.
Andrey Ignatenko’s Math Bitcoin price prediction predicts the growth of Bitcoin using Mathematics as its sole methodology. It Predicts the price of Bitcoin up to 2030,2040 and 2050 with Bitcoin predicted to hit six figures before the year 2030.
What To Know
- Bitwise is one of the asset Managers who invested in Bitcoin and Ethereum Exchange Traded Funds in the United States. Matt Hougan who happens to be their Chief Investment Officer (CIO) is a trusted voice in the crypto field and releases a monthly memo on Bitcoin price actions.
- Bitcoin at the moment is currently exchanging hands for $72, 409 1.8% down from its all-time high of $73,737.