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, Bitwise chief investment officer Matt Hougan said.
Hougan said that while the two arguments addressed the original question, they were separate points with potential price outcomes.
Bitcoin’s total market capitalization of $1.4 trillion is currently around 7%-8% of gold’s $18 trillion market cap, but Hougan said that BTC can “mature” and become worth about half of gold’s total value, making one Bitcoin worth roughly $400,000.
If Bitcoin just holds a 7% share relative to gold and 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.”
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.
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.
The asset had since retraced slightly and was trading for $72,392 at the time of publication.