The chief investment officer (CIO) of Bitwise Asset Management Matt Hougan is highlighting one catalyst that could have a massive impact on the price of Bitcoin (BTC).
In an interview on the Mr. M Podcast, Hougan says that the price of Bitcoin could rise exponentially if the crypto king is adopted as a reserve asset by various countries across the globe.
“There’s this question of whether we will see governments around the world starting to add Bitcoin to their own balance sheets. I would say that that possibility is not priced into the market at all. Like zero.
If that becomes a reality, I think you’re talking about Bitcoin being many hundreds of thousands of dollars. There’s just not enough Bitcoin in the world to support, to facilitate that kind of demand without prices going substantially higher.
So I think this is a real sea change. I think investors have underestimated it. I think it’s going to have a long-tail effect. It will extend the bull market substantially in 2025 and potentially beyond.”
According to Hougan, the number of new Bitcoin expected to be mined in 2025 will be inadequate to meet the demand that he expects to come online.
“The Bitcoin Network is going to produce about 160,000, 170,000 Bitcoin [in 2025]. Corporations bought 270,000 [BTC] last year, and exchange-traded funds (ETFs) bought 400,000 – 500,000 [BTC].
Governments are talking about buying hundreds of thousands. Any one of these sources is more than all the net new Bitcoin that comes out of the market. And that means, just from a simple perspective, that in order to satisfy that demand, which I think is unstoppable, I think you’re going to see all three sources buy hundreds of thousands of Bitcoin. People who hold Bitcoin today have to sell.
Maybe they’re willing to sell at $100,000. But if they’re not, what is the next level at which enough of them will sell? Is it $125,000? Is it $150,000? Is it $200,000?
I think the market could sort of find itself in an air gap where people are unwilling to sell until it gets to a new major level. And that move could be very violent.”
Bitcoin is trading at $94,744 at time of writing.
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