Matt Hougan, chief investment officer at Bitwise Asset Management, said Bitcoin could reach $1 million per coin if the digital asset gains a larger share of the global store-of-value market and that market continues to expand over the next decade.
Hougan laid out the argument in a memo titled “How Bitcoin Gets to $1 Million,” published on Tuesday. The memo examines how investors often evaluate the cryptocurrency with what Hougan described as “static math,” which assumes the store-of-value market remains the same size over time.
Bitcoin traded near $69,500 at the time of writing. A move to $1 million would represent roughly a fourteenfold increase from current levels.
“$1 million sounds crazy. It implies bitcoin will rise 14x from today’s price,” he wrote in the memo.
Store-of-value market framing shapes the projection
Bitcoin as a digital store-of-value asset that competes with Gold. The model for estimating Bitcoin’s long-term value follows a simple calculation. Investors estimate the size of the global store-of-value market, calculate Bitcoin’s potential share of that market, and divide the result by the fixed supply of coins.
Bitcoin has a maximum supply of 21 million coins. The limit forms a core part of the asset’s economic design.
The current store-of-value market stands just under $38 trillion. Gold accounts for about $36 trillion of that total. Bitcoin represents roughly $1.4 trillion, or slightly less than 4% of the market.
Viewed in isolation, those numbers make a $1 million Bitcoin appear unlikely. At today’s market size, the cryptocurrency would need to capture more than half of the entire store-of-value market to reach that price level.
Hougan said that assumption misses a key point. The market itself does not remain static.
Gold’s growth shows how the market can expand
The memo highlights the historical expansion of the gold market as a reference point for the broader store-of-value category.
The first U.S. gold exchange-traded fund launched in 2004. At that time, the total gold market stood near $2.5 trillion. Hougan wrote that the market now approaches $40 trillion.
Several macroeconomic factors contributed to that growth. Hougan cited rising government debt, geopolitical uncertainty, and accommodative monetary policy as major drivers of demand for stores of value.
The growth rate of the gold market over that period averaged about 13% per year.
Continuation of similar expansion would reshape the valuation framework for Bitcoin. If the store-of-value market grows at a comparable pace for the next decade, it could reach roughly $121 trillion.
“The global ‘store of value’ market will be ~$121 trillion in 10 years,” Hougan wrote. “Bitcoin only needs to take 17% of the market to be worth $1 million a coin.”
Under that scenario, Bitcoin would not need to dominate the market. It would need to grow its share from about 4% today to roughly 17%.
Institutional adoption changes the market structure
The memo points to major structural changes in the cryptocurrency market over the past several years.
Spot Bitcoin exchange-traded funds in the United States now attract substantial inflows. Those funds rank among the fastest-growing ETFs in history. Institutional investors also entered the market in larger numbers.
Ownership now includes large organizations such as the Harvard endowment and the Abu Dhabi sovereign wealth fund. That shift marks a contrast with earlier years when institutional participation remained limited.
The perception of risk has also changed. Bitcoin once faced strong resistance from professional investors because of its volatility. Hougan said the long-term volatility of the asset has declined compared with earlier cycles.
As a result, some portfolio managers now consider allocations near 5%. Earlier guidance from many institutions placed recommended exposure closer to 1%.
Risks remain despite bullish projections
Several assumptions underpin the projection.
The store-of-value market may not expand at the same rate as it did over the past two decades. Economic conditions could change. Gold prices could fall if macroeconomic pressures ease.
Bitcoin could also fail to capture additional market share. The asset still competes with other stores of value, and adoption does not follow a guaranteed path.
The memo also considers the possibility that the forecast proves conservative.
Hougan noted that concerns about government debt and fiat currency debasement could accelerate demand for alternative stores of value.
“As I see it, the base case — that the store-of-value market will continue to grow as it has, and bitcoin will continue to gain market share as it has — leads you to much, much higher prices than we have today,” Hougan wrote.
He has explored similar scenarios before. In a 2023 memo, Hougan said Bitcoin could exceed $1 million by 2032. Last month, he discussed in the interview with Coindesk a longer-term outlook that placed Bitcoin near $6.5 million over the next twenty years.
Maryna Hornieieva
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