Bitwise Chief Investment Officer Matt Hougan knows that Bitcoin is on the cusp of a big breakout. With growing institutional adoption and a supply constrained market, it might reach $200,000 by the end of 2025. Meanwhile, corporations and Bitcoin ETFs are gobbling up massive quantities of newly minted Bitcoin. This trend is indicative of an increasing understanding of Bitcoin’s relevance to global capital markets. Now, governments and a growing number of companies are preparing to enter the battle. This will narrow the supply and push prices higher.
Institutional Investors Fuel Bitcoin Demand
Institutional investors are beginning to recognize Bitcoin as a key asset. Continuing to 2024, Bitcoin exchange-traded funds (ETFs) bought up the available supply, snapping up one half million BTC, while corporations bought up an estimated 350,000 Bitcoin. Hougan anticipates hundreds of companies rushing to list in 2025. They’ll be lured in by Bitcoin’s appeal as the new gold—a true store of value and the best inflation hedge.
Hougan shares the view that governments will start to stockpile Bitcoin. He says they’re going to purchase several hundred thousand BTC tokens within the next year. Regardless, this purchase will pile another layer of demand on top of the market. This flood of institutional and governmental investment speaks volumes about Bitcoin’s increasing acceptance as a mainstream asset.
Supply Constraints Intensify Price Pressure
Perhaps the most important supply side factor driving Bitcoin price upward is its limited supply. In comparison, the supply of newly mined Bitcoins each year is capped at just 165,000. This figure is a small drop in the bucket compared to the demand today, which has far exceeded supply for over a decade. That imbalance between supply and demand can take Bitcoin prices significantly higher as well. As even more institutions and governments join the market, the demand continues to skyrocket.
Hougan emphasizes that failing to hold Bitcoin could position investors as being "short" against the benchmark of global capital markets. He anticipates the same pattern of behavior will happen as Bitcoin approaches each new psychological price level, which would set off a chain reaction of further price appreciation.
Bullish Outlook Maintained
Indeed, Bernstein continues to have a bullish long-term outlook on Bitcoin, similar to Hougan’s view. Bernstein's confidence is rooted in several factors that they believe will propel Bitcoin's value in the coming years. Collectively, these factors contribute to the ongoing trend of increasing institutional adoption, limited supply and a growing recognition of Bitcoin’s role in the global financial system.
The combination of these factors in conjunction indicates a very bright future ahead for Bitcoin. And institutional investors and governments are turning up the pressure. In the meantime, that supply is severely constrained, which creates a perfect storm for potential price appreciation.
