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exclusively interview In collaboration with Yahoo Finance, Matt Hougan, chief investment officer at Bitwise Asset Management, shared his bullish outlook on bitcoin, projecting significant price appreciation by the end of 2025. “We expect bitcoin to surpass $200,000 by this time next year.” Hougan said. , attributing this forecast to three main sources of demand: exchange-traded funds (ETFs), corporate investments and government acquisitions.
Hougan explained: “There are ETFs that are absorbing bitcoin, public companies like MicroStrategy are accumulating bitcoin, and now we are 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 the price.”
When asked about the sustainability of such demand, Hougan emphasized the gradual awakening of different investor segments to bitcoin's value proposition. “People just wake up to bitcoin at different rates. “We have seen retail investors participate first, followed by companies and financial advisors, and now institutions are recognizing that bitcoin belongs in a diversified portfolio,” he explained.
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“bitcoin is now a global macro asset worth a few trillion dollars, and virtually every investor should have some exposure. We still have a large number of investors ahead of us, so I think we are still in the early stages of this journey. We have many quarters ahead of us,” he added.
How high can the price go if the United States buys bitcoin?
A key aspect of Hougan's forecast hinges on the possible establishment of a Strategic bitcoin Reserve (SBR) in the US. Addressing this, Hougan commented: “If we get a strategic bitcoin reserve where the government buys bitcoin, as proposed in Senator Lummis' bill for the government to buy one million bitcoin, $200,000 worth of bitcoin will look quaint. You will see three and four $500,000 Bitcoins. It's too big a story because governments around the world would have to do it.”
Hougan admitted that he was initially skeptical of Trump's suggestions to establish an SBR. “But over the months, it hasn't gone away; in fact, we continue to see Trump Administration leaders suggest they're open to it,” Hougan said. The bitcoin CIO still thinks the chances of the US government buying bitcoin are less than 50%, but “not zero,” he added. “If it happens or if we start to see it in other countries, we will see a breakout in bitcoin that will make 2024 look quite slow 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 brokerage size,” he noted.
“Coinbase has had no major competitors challenging it; has had a certain degree of regulatory capture, if you can believe it. As a result, it has been able to maintain its high margins on brokerages and then layer on things like stablecoins. (…,.) It will also help if it gets into the S&P 500; you see institutions buying it widely. I think it's a really unique situation driven by the fact that there was so much regulatory uncertainty: it cleared the competitive path and now it's going to reap those rewards and build a really, you know, maybe unsellable position leading this industry in the US.”
Looking at the broader market, Hougan anticipated an influx of cryptocurrency-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, setting the stage for a strong IPO window in 2025.”
Despite the optimistic outlook, Hougan acknowledged potential risks that could impede bitcoin's growth. “The biggest risk is that politicians will not keep their promises: if we fail to achieve regulatory clarity or fail to establish a strategic reserve, the expected bull market may not materialize,” he warned. “Regulatory and political factors are crucial drivers for cryptocurrencies 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
