It’s “Still Early” Until Bitcoin Hits $500,000 – Bitwise CIO Explains Why

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As a seasoned researcher with extensive experience in the ever-evolving world of cryptocurrencies, I find myself intrigued by Matt Hougan’s assertion that Bitcoin still has room to grow before it reaches the $500,000 mark. While I must admit that I have seen my fair share of market fluctuations over the years, this prediction is nothing short of breathtaking.

In the opinion of Matt Hougan, Bitwise’s Chief Investment Officer, there is still plenty of time to invest in Bitcoin (BTC). He recently stated that even when Bitcoin reaches a value of $500,000, it would still be considered “early” in its growth potential.

Potential Investors Should Not Be Discouraged By Bitcoin Price Action

Yesterday, Bitwise’s Chief Investment Officer Hougan expressed in a client memo that although we’re not at the very start of the game anymore, it’s essential to note that the bitcoin market still has plenty of room for growth until its price reaches $500,000. Hougan provides detailed reasoning behind this statement.

Hougan’s remarks emerge as Bitcoin proceeds through its record-breaking price exploration stage. This digital currency reached a new peak ($89,864) on November 12, only to drop slightly to around $85,200 since then.

The leading digital asset is up more than 100% on a year-to-date (YTD) basis. It has surged more than 25% since Donald Trump’s victory in the 2024 US presidential election, currently commanding a total market cap of $1.76 trillion.

According to Hougan, the $100,000 price for Bitcoin could be just a step away. On the other hand, Bitwise CIO stated that even though some investors might think they’ve already missed their chance, the truth is we are still in the early stages of Bitcoin’s growth, with potential values up to $500,000 yet to come.

Hoagan underscored two crucial aspects driving Bitcoin’s potential reach of the stated price goal. First, there’s a growing preference for value-storage assets such as Bitcoin and gold due to devaluation of fiat currencies by governments.

Furthermore, Bitcoin (BTC) might gain advantages due to its growing recognition as a form of value storage. As this innovative asset continues to develop, it may challenge traditional assets such as gold, which has already solidified its position in the market. According to Hougan, this is his explanation:

Despite its recent surge, Bitcoin continues to evolve, as it’s noteworthy when pension funds and endowments dabble in cryptocurrencies. The Department of Labor advises caution for 401(k) providers regarding Bitcoin investments, stressing the importance of “extreme care.” Meanwhile, there is ongoing enthusiasm when prominent hedge fund managers express a favorable opinion about digital currencies.

The significant achievement in Bitcoin’s market was emphasized by Hougan, particularly the thriving success of Bitcoin spot exchange-traded funds (ETF). According to SoSoValue’s statistics, the combined worth of net assets across various US-based Bitcoin spot ETFs surpasses $94 billion, accounting for approximately 5.3% of the entire Bitcoin market capitalization.

Concerning the proposed $500,000 price for Bitcoin (BTC), Hougan emphasized a striking contrast. Currently, gold’s market capitalization stands at approximately $18 trillion, while Bitcoin’s is less than half at around $2 trillion. He suggested that a fully-grown Bitcoin should have a market cap equivalent to that of gold.

What Will Take BTC To $500,000?

As per Hougan’s perspective, although Bitcoin’s popularity is increasing, there’s a crucial factor yet to be addressed that prevents it from reaching its lofty price goal – the approval from central banks.

It’s worth noting that at present, governments control nearly 20% of all gold reserves, whereas their holdings of Bitcoin are significantly lower, sitting at less than 2%. For Bitcoin to achieve a value of half a million dollars each, this disparity needs to be reduced substantially.

The Chief Information Officer of Bitwise mentioned that Senator Cynthia Lummins had expressed desires for the U.S. to create a strategic Bitcoin reserve during Donald Trump’s presidency. Given that favorable cryptocurrency regulations were a significant aspect of Trump’s campaign, it wouldn’t be unexpected if his administration considered establishing a sovereign Bitcoin strategic reserve.

Similarly, analysts from research company Bernstein have expressed that their prediction of Bitcoin reaching $200,000 by 2025 could be considered overly modest. Currently, Bitcoin is trading at approximately $89,560, representing a 4.5% increase over the past 24 hours.

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2024-11-14 09:12