Key Takeaways
- Bitwise’s CIO sees substantial potential gains over a 10-year horizon.
- Hougan compares bitcoin with gold’s rise from roughly $2.5 trillion.
- He identifies investor behavior as bitcoin’s biggest investment risk.
Gold’s Rise Offers a $30 Trillion Bitcoin Comparison
Bitcoin could follow gold into a much larger market as institutional ownership expands, according to Matt Hougan, chief investment officer of Bitwise Asset Management. In an Oct. 9 post on X, he reinforced his comparison between gold and bitcoin exchange-traded fund (ETF) launches while sharing a video clip posted by media outlet Simply Bitcoin.
The remarks contrasted gold’s estimated $2 trillion to $2.5 trillion market capitalization when the first U.S. gold exchange-traded fund (ETF) launched in 2004 with its subsequent expansion to roughly $30 trillion. Hougan put bitcoin’s market value at roughly $2 trillion when its ETFs launched in 2024, suggesting it could follow a similar growth trajectory. The Bitwise investment chief said:
“I think it could easily do what gold did, which is run up to $30 trillion, and that arrives at a pretty nice price target.”
The comparison builds on Hougan’s argument that sustained ETF buying could tighten bitcoin’s available supply over time. Existing holders’ sales initially absorb demand, he noted in January, but continued buying could exhaust willing sellers. Bitcoin was trading at $82,766 at the time of writing.
ETF Access Puts Bitcoin’s Long-Term Growth in Focus
U.S. investors gained a new route to direct bitcoin price exposure after the Securities and Exchange Commission (SEC) approved spot bitcoin investment products on Jan. 10, 2024. The authorization allowed shares of products holding coins to trade on stock exchanges.
The fund structure lets investors gain bitcoin exposure through regular brokerage accounts without handling cryptocurrency wallets or private keys. Shareholders hold shares tracking the underlying asset.
Hougan’s earlier scenario for bitcoin reaching $1 million per coin used a different calculation. In a March 10 memo, he envisioned the combined gold-bitcoin store-of-value market reaching approximately $121 trillion within 10 years if historical growth continued. Bitcoin would need about 17% of that expanding pool to support the price.
Bitwise has also pointed to bitcoin’s stronger correlation with gold. Bitwise data through Aug. 31 showed their rolling 90-day correlation above 0.5, its highest level since 2020, indicating a tendency for their price changes to move in the same direction.
Investor Behavior Could Derail the Decade-Long Outlook
Substantial long-term gains could still arrive through repeated rallies and declines, making investors’ responses central to Hougan’s outlook. In the video clip, he identified their ability to endure rising and falling markets as his biggest concern, placing it ahead of threats to bitcoin’s operating rules or security from quantum computers.
Excessive leverage and exhaustion from market swings have already hurt participants, Hougan observed. Leverage amplifies losses as well as gains and can force positions to close during declines before any subsequent recovery.
That emphasis on patience aligns with findings from Bitwise’s survey of 15 large institutions. Published in September, the interviews revealed that none named price as a reason to exit crypto positions. Respondents nevertheless classified bitcoin differently, including as a store of value and a technology investment.
Hougan also suggested keeping some capital invested with a 10-year horizon to see how the thesis develops. He characterized the potential gains as substantial and life-changing.
