Bitwise CIO Matt Hougan projects $1.3 million Bitcoin if it captures 33% of store-of-value market

Bitcoin’s store-of-value potential

Hougan argued that Bitcoin’s true value lies in its ability to compete directly with traditional store-of-value assets—including gold, offshore wealth, and global reserve holdings. He modeled the combined size of these markets at about $80 trillion, factoring in gold reserves, central bank holdings, and savings vehicles worldwide.

According to Hougan’s projection, if Bitcoin manages to capture 33% of this market, it would attract roughly $26 trillion in value. When this figure is divided by Bitcoin’s limited supply of 21 million coins—excluding coins that have been irretrievably lost, as accounted for by analytics firms like Glassnode—the implied per-coin price approaches $1.3 million.

Hougan noted that Bitcoin’s scarcity is a crucial factor for institutional investors, stating that, “If Bitcoin captures only a third of the market, every Bitcoin ends up being worth about $1.3 million.”

Bitwise, known for its BITB spot Bitcoin ETF, emphasizes that the fixed and transparent supply model positions Bitcoin as a unique asset compared to traditional vehicles. The company maintains that scarcity and transparency drive significant capital allocation from institutional investors.

ETF flows and evolving institutional landscape

Recent activity in spot Bitcoin ETFs has drawn attention, with platforms such as SoSoValue reporting more than $50 billion in net inflows since January 2024. Corporate treasuries, once dominated by MicroStrategy’s sizeable Bitcoin holdings, are now being joined by a broader array of institutions, according to data compiled by Arkham Intelligence.

As the US national debt surpasses $35 trillion and central banks experiment with tokenized reserves, demand for non-sovereign stores of value is rising. Bitwise maintains that this environment could promote alternative assets, but also highlights risks such as ongoing price volatility, unclear regulatory guidance from the Securities and Exchange Commission, and competition from emerging alternatives like tokenized gold.

Mini dictionary: Arkham Intelligence is a blockchain analytics platform focused on identifying and analyzing crypto wallet ownership and activity, providing insight into institutional and large-scale holdings.

Potential impact on the broader industry

A significant adoption of Bitcoin as a global store of value would have far-reaching effects on exchanges, custody institutions, and Layer 2 blockchain networks like Lightning and Stacks. Developers and service providers in these sectors could see a dramatic evolution in liquidity standards, custodianship protocols, and transaction fee structures.

Such a shift would likely prompt industry stakeholders to lobby for clearer regulatory definitions of Bitcoin, seeking its formal recognition as a legitimate asset class suitable for inclusion in traditional investment portfolios.

With increased institutional adoption, the demand for robust infrastructure, standardized fee markets, and regulatory clarity would quickly escalate for all parties involved in Bitcoin’s ecosystem.

Bitwise’s vision for Bitcoin reflects a broader trend among asset managers and institutional investors seeking non-sovereign stores of value that can provide diversification and potential long-term growth in an evolving economic landscape.