Bitcoin’s Million Dollar Dream: Bitwise Lays Path To $1 Million Per Coin
Despite the fact that Bitcoin (BTC) is trading about 40% below its high and is struggling to maintain stability above the 70,000 mark, the long-term outlook for its value remains intact, especially according to Matt Hougan, Chief Investment Officer at Bitwise Asset Management.
The latest report titled “How Bitcoin Gets to $1 Million,” Hougan argues that Bitcoin is turning into a commodity of increasing value, serving the same function as gold.
Path to $1 Million
Hougan presents a direct way to estimate the potential value of BTC. The process involves measuring the market size of a store of value, determining the Bitcoin share of that market, and then dividing it by its combined supply of 21 million coins.
Currently, the total market-store-of-value it sits at just under $38 trillion, including about $36 billion in gold and $1.4 billion in Bitcoin. As a result, Bitcoin currently commands slightly less than 4% of this market.
According to Hougan, this figure may lead many to believe that the price of Bitcoin of $ 1 million is unreasonable, especially since, in order to reach that valuation, Bitcoin will need to capture more than 50% of the market of the store of value.
However, the executive notes an important aspect that is often overlooked: the value store market is not static. It has seen tremendous growth over the past two decades, and growing concerns devaluation of fiat currencythis trend will probably continue.
Potential Growth of Bitcoin
A key point in Hougan’s analysis is that the value storage market is expected to grow significantly. He predicts that within ten years, this global market could reach about $121 trillion.
Under this scenario, Bitcoin would only need to capture about 17% of the market to achieve the price target. $1 million per character. Although achieving this level of growth-increasing from the world 4% to 17%-requires significant progress, it seems increasingly possible given the recent development of Bitcoin, he said.
While Hougan acknowledges the optimism associated with this forecast, he also highlights potential risks. If the global retail price market does not continue to grow as it has for the past two decades, there may be a fall in gold prices. In addition, Bitcoin may struggle to gain more market share.
On the other hand, Hougan warns that these predictions may be too conservative. Like climbing anxiety government debt reaching critical levels, the growth of the value store market may accelerate, resulting in BTC gaining a larger than expected 17% share.
He insists that the prevailing view—when both the market-value of the store continues to grow, and BTC increases its share—would mean much higher prices than today.
At the time of writing, BTC was trading at around $70,130, registering gains of 8% over the past two weeks, according to CoinGecko. data.
Featured image from OpenArt, chart from TradingView.com
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