Matt Hougan, chief investment officer (CIO) at cryptocurrency asset manager Bitwise, argued that Bitcoin (BTC) will be the world’s best-performing major investment asset over the next 10 years. The prominent executive said Bitcoin could reach $1.6 million by 2036, and explained the calculations behind his prediction.
Appearing on Laura Shin’s Unchained program, Hougan shared his assessment of Bitcoin’s long-term potential. He said Bitwise’s $1.6 million price target for 2036 rests on two fundamental assumptions: growth in the global store-of-value market and an increasing share of that market held by Bitcoin.
How Will Bitcoin Reach $1.6 Million?
Hougan said the global store-of-value market, made up mainly of gold and Bitcoin, is currently worth about $30 trillion. He noted that the market has grown by an average of 13 percent a year over the past 20 years. If that pace continues, he said, it could be worth about $90 trillion in 10 years.
The Bitwise executive said Bitcoin currently accounts for about 5 percent of the market and could claim 25 percent in 10 years.
Hougan said Bitcoin could reach the $1.6 million target if both assumptions prove true.
However, the figures cited contain a mathematical inconsistency. A 25% share of a $90 trillion market would give Bitcoin a market capitalization of $22.5 trillion. Based on Bitcoin’s maximum supply of 21 million units, that would imply a price of about $1.07 million. Different or additional assumptions would therefore be needed to account for the $1.6 million target.
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Hougan also called it significant that JPMorgan Asset Management included Bitcoin in its long-term capital market outlook.
Hougan said JPMorgan expects Bitcoin to return about 10 percent annually on a compound basis, while Bitwise’s forecast assumes an annual return closer to 30 percent.
Citing the growing acceptance of Bitcoin by traditional financial institutions, Hougan pointed to Wells Fargo, Morgan Stanley, and other major institutions moving into the cryptocurrency market as signs of the shift.
Hougan said Bitcoin’s inclusion in portfolios by large asset managers, rising interest from central banks, and institutional demand for spot Bitcoin ETFs could help increase the cryptocurrency’s share of the global store-of-value market.
Hougan said Bitcoin’s share of the market has risen from about 0.1% to 5% over the past 10 years, and argued that reaching 25% in the next 10 years is possible.
The prominent executive also said he believes Bitcoin hit bottom in June and that the cryptocurrency market may be entering a new, multi-year bull cycle. However, he acknowledged that quantum computers could pose risks, particularly to older Bitcoin addresses believed to belong to Satoshi Nakamoto.
*This is not investment advice.
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