Growing investment in “store-of-value” assets and continued fiat currency devaluation could propel the price of Bitcoin to six figures without the need for the US dollar to collapse, says Bitwise Chief Investment Officer Matt Hougan.
In an Oct. 29 post to X, Hougan addressed a question he’d received from a financial advisor, which asked whether or not Bitcoin could reach a value of $200,000 without some kind of US currency collapse. “When you invest in Bitcoin, you’re actually making two bets at once,” said Hougan in a post in response to the question.
He said that Bitcoin (BTC) will succeed in establishing itself as a “new store-of-value asset” while governments will continue to “abuse fiat currencies” — something that will naturally result in increased demand for hard assets like BTC.
Hougan said that while two arguments addressed the original question, they were two separate points each with their own potential price outcome.
Bitcoin’s total market capitalization of $1.4 trillion is currently around 7-8% of gold’s $18 trillion market cap, but Hougan says that BTC can “mature” and become worth around half of gold’s total value, making one Bitcoin worth roughly $400,000.
He added that because governments are currently “abusing” their control over the supply of fiat currency through money printing, more investors will be inclined to own store of value assets.
If Bitcoin just holds its 7% share relative to gold and the demand for Bitcoin alone triples, each BTC would be worth $200,000.
“Importantly, these arguments compound. If Bitcoin matures and the store of value market doubles, you quickly get to seven figures,” he said.
“I think this is the most likely scenario eventually.”
Source: Matt Hougan
Demand for more traditional store-of-value assets has risen sharply amid increasing global economic uncertainty and growing geopolitical tensions in the Middle East, with gold prices notching a new all-time high of $2,778 per ounce on Oct. 29.
Additionally, continued dollar devaluation will likely form a core part of the United States’ industrial policy according to an Oct. 29 report by institutional investor news outlet Financial Sense.
Related: Paul Tudor Jones says ‘all roads lead to inflation,’ long Bitcoin
In the report, economists Marc Fasteau and Ian Fletcher argued that the US needs a robust industrial policy to compete in the global economy, particularly against China.
Such a policy “should include support for new technologies, protection against subsidized competition, and a concerted effort in lowering the value of the dollar,” they said.
Diminishing USD purchasing power. Source: Visual Capitalist
Several market commentators believe Bitcoin is poised to reach a new all-time high in the coming weeks, after coming within spitting distance of its March all-time high during late trading on Tuesday, Oct. 29, when it tapped $73,562, according to CoinGecko data.
The asset had since retraced slightly and is trading for $72,392 at the time of publication.
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