Bitwise CIO: “Bitcoin could hit $1 million… emerging as an alternative to gold”

A forecast that Bitcoin (BTC) could reach $1 million over the long term has resurfaced.

According to The Block on the 10th (local time), Matt Hougan, chief investment officer (CIO) of Bitwise, said in a memo released that day that Bitcoin is emerging as an asset competing with gold in the global store-of-value market.

Hougan explained, “To judge whether Bitcoin can reach $1 million, you have to look at the total size of the store-of-value market and the share Bitcoin could capture within it.” He estimated the current global store-of-value market at about $38 trillion. Of that, gold accounts for roughly $36 trillion, while Bitcoin stands at around $1.4 trillion.

He noted that at current levels Bitcoin would appear to need to take more than half of this market to reach $1 million, but pointed out that many investors underestimate that the store-of-value market itself continues to expand. In fact, when the first U.S. gold exchange-traded fund (ETF) launched in 2004, the gold market was about $2.5 trillion, but has since expanded to around $40 trillion.

Hougan attributed the expansion of the gold market to rising government debt, geopolitical uncertainty, and accommodative monetary policy. If the same trend continues, he said, the global store-of-value market could grow to about $121 trillion over the next 10 years; in that case, Bitcoin could reach $1 million per coin even with only about a 17% share.

He added that the recent environment in the digital asset (cryptocurrency) market is also lending support to this outlook. A few years ago there was no U.S. spot Bitcoin ETF and institutional participation was limited, but now spot ETFs are rapidly absorbing inflows, and the Harvard University endowment and the Abu Dhabi sovereign wealth fund have also secured Bitcoin exposure, he said.

He also cited declining volatility as a positive factor. Hougan said that as Bitcoin’s long-term volatility has fallen, some professional investors are considering allocations of about 5%—above the previous level of around 1%.

Still, he acknowledged that the store-of-value market may not grow at the same pace as in the past and that Bitcoin may fail to gain additional share. Even so, Hougan said, “The base case is that the store-of-value market continues to grow as it has so far and Bitcoin continues to expand its share as it has so far,” adding that “viewed that way, you get a price far higher than today.”