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Matt Hougan, chief investment officer at Bitwise Asset Management, addressed a pressing question among investors: Does the US dollar need to collapse for bitcoin to reach a valuation of $200,000 per coin? Hougan's analysis suggests that bitcoin's rise to such a price level does not depend on a decline in the value of the US dollar but rather on the maturation of bitcoin as a store of value asset and global economic factors increasing demand for said assets.
bitcoin can reach $200,000 without the US dollar collapsing
In a series of x.com/Matt_Hougan/status/1851306064571949208″ target=”_blank” rel=”nofollow”>publications On social media platform x, Hougan recounted a conversation with a financial advisor who raised the question over dinner. “Does the US dollar need to collapse for bitcoin to reach $200,000? The answer is 'no'. Here’s why,” Hougan wrote.
Hougan explained that investing in bitcoin involves making two different bets. First, “bitcoin will establish itself as a new ‘store of value’ asset.” Currently, bitcoin's market capitalization is approximately 7% of the $18 trillion gold market. Hougan noted: “If it 'matures' and becomes 50% the size of gold, each bitcoin will be worth over $400,000.
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Second, “governments will abuse fiat currencies and increase demand for 'store of value' assets.” If the store of value asset market triples in size due to such mismanagement, and bitcoin maintains its 7% market share, “each bitcoin is worth more than $200,000.”
He emphasized that these two arguments are independent but can be combined. “If bitcoin matures and the store of value market doubles, it will quickly reach seven figures. For what it's worth (FWIW), I think this is ultimately the most likely scenario,” Hougan said.
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Responding directly to the initial question, Hougan stated: “So, no, the dollar does not need to collapse for bitcoin to reach $200,000. “All you need is bitcoin to continue on its current path of maturation as an institutional asset.” He added that it is increasingly likely that both factors (btc maturation and potential fiat currency abuse) will occur simultaneously. “That's why bitcoin is hitting all-time highs.”
The discussion continued with the contribution of Kevin Brent Cook, an x user, who added nuances to Hougan's explanation. “Concise, clear and simple,” Cook commented. “I would only add that the reason a 'collapse' is not necessary is that beneath the 'fiat abuse' comes the constant routine of deficit-driven dollar inflation (the US writes endless checks that never bounce), which which naturally creates more currency chasing. all the goods.”
Hougan agreed with Cook's assessment and responded with a succinct “Agreed.”
At the time of this publication, btc was trading at $72,445, an increase of 23% in the last 20 days.
Featured image created with DALL.E, chart from TradingView.com
