coindesk.com
Bitcoin will draw trillions of dollars from institutional investors over the next decade as financial advisers, family offices, pension plans and sovereign wealth funds begin to view it as a mainstream financial asset, Bitwise Chief Investment Officer Matt Hougan told CoinDesk.
The first professional investors to allocate at scale will be financial advisers and family offices, Hougan said in an email interview on Friday. The shift, said Hougan, is already visible in 13F filings for spot bitcoin ETFs and in moves by large wealth firms, including Morgan Stanley and Wells Fargo, to make bitcoin more accessible to clients.
Over time, Hougan expects the money to come from even larger pools of capital: foundations, endowments, pension plans, insurance companies, sovereign wealth funds and central banks.
“It’s a process that will take 10+ years,” Hougan said.
The scale matters. Those institutions control between $100 trillion and $200 trillion in assets globally, he said. A 1% allocation to bitcoin would be enough to support his long-term price targets.
Hougan's $1.3 million $BTC price target by 2035 rests on bitcoin taking a 25% share of an expanding store-of-value market. Gold’s market capitalization has risen from about $2 trillion when gold ETFs launched in 2004 to roughly $30 trillion today, he said. If the market keeps expanding at its historical 13% annual pace for another decade, bitcoin reaching a quarter of it would put each coin at $1.3 million.
“When people value bitcoin, they often talk about it as competing with gold for the ‘store of value’ market. They say something like: Gold is a $30 trillion asset. If bitcoin can take 50% of the market, each bitcoin will be worth $715,000,” he said.
“Institutions have most of the money in the world,” Hougan said. “Crypto grew up in retail, which took it from $0 to $2 trillion. But if it wants to get from $2 trillion to $20 trillion, it’s going to be institutional capital that leads the way.”
Strategy has been one of the biggest buyers of bitcoin for years, becoming the world’s largest corporate holder of $BTC with 842,138 $BTC, even after some modest recent sales. But Hougan believes it will no longer be bitcoin’s primary driver of demand.