Matt Hougan, chief investment officer at Bitwise Asset Management, believes Bitcoin could eventually reach a price of 1 million dollars if it captures a modest share of the global store of value market.
In a recent memo, Hougan explained that Bitcoin would only need to secure about 17 percent of a projected 121 trillion dollar store of value market to reach that valuation.
The Math Behind the Projection
Hougan acknowledged that the idea may initially sound unrealistic since a 1 million dollar price would require Bitcoin to rise roughly fourteen times from current levels. He noted that he once dismissed the possibility himself in 2018 when Bitcoin was trading near 4,000 dollars.
After examining Bitcoin’s role in financial markets, he concluded that many analysts underestimate its potential by assuming the store of value market will remain static instead of expanding. Hougan views Bitcoin as a developing digital store of value that competes with traditional assets such as Gold by allowing investors to preserve wealth outside conventional banking systems and fiat currencies. However, he acknowledged that Bitcoin remains more volatile and less established than gold.
Hougan explained that estimating Bitcoin’s future value involves measuring the size of the global store of value market, calculating the portion Bitcoin might capture, and dividing that value by the cryptocurrency’s maximum supply of 21 million coins.
Based on current estimates, the store of value market is just under 38 trillion dollars. Roughly 36 trillion dollars of that total comes from gold while about 1.4 trillion dollars is attributed to Bitcoin. This means Bitcoin currently represents slightly under four percent of the market.
Under present conditions, a 1 million dollar Bitcoin would appear unlikely because it would require the cryptocurrency to capture more than half of the existing market. Hougan described that requirement as an extremely high threshold.
However, he emphasized that the store of value market has expanded significantly over time and could continue growing. As an example, he pointed to the launch of the first United States gold exchange traded fund in 2004. At that time, the global gold market was valued at about 2.5 trillion dollars.
Since then, gold’s total value has increased to nearly 40 trillion dollars, representing an average annual growth rate of around 13 percent. This growth has been driven by rising government debt, geopolitical uncertainty, loose monetary policy, and broader macroeconomic pressures.
If the store of value market continues growing at a similar pace, Hougan estimates it could reach around 121 trillion dollars within the next decade. In that scenario, Bitcoin would only need to capture about 17 percent of the market to reach a valuation of 1 million dollars per coin. Although Bitcoin’s current share remains near four percent, Hougan believes increasing adoption could allow it to expand significantly.
Potential Risks
Hougan also highlighted several risks that could prevent this outcome. The store of value market may not maintain the same pace of growth seen over the past two decades. That period included major events such as the Global Financial Crisis, widespread use of quantitative easing, and a long stretch of very low interest rates.
If these conditions change, growth in the market could slow and gold prices could decline. Another possibility is that Bitcoin fails to increase its share of the market.
At the same time, Hougan noted that current projections could also underestimate Bitcoin’s potential if concerns about rising government debt intensify and investors increasingly seek alternative stores of value. Under his base scenario, the store of value market continues to expand while Bitcoin gradually captures a larger portion, a combination that could push prices far beyond current levels.#crypto #cryptonews https://t.me/coinsignalpublic https://coinsignals.net
