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Matt Hougan, chief investment officer at Bitwise Asset Management, addressed a burning question for investors: Does the US dollar have to crash for Bitcoin to reach a valuation of $200,000 per coin? Hougan’s analysis suggests that Bitcoin’s entry to this price level is not dependent on a decline in the value of the US dollar, but rather on Bitcoin’s maturation as an asset that stores value and global economic factors increasing demand for such assets.
Bitcoin could reach $200,000 without the US dollar collapsing
In the series posts on social media platform X, Hougan recounted a conversation with a financial advisor who asked this question over dinner. “Does the US dollar have to fall for Bitcoin to reach $200,000? The answer is no. Here’s why,” Hougan wrote.
Hougan explained that investing in Bitcoin involves making two different bets. First, “Bitcoin will succeed in establishing itself as a new asset that stores value.” Currently, Bitcoin’s market capitalization is approximately 7% of the $18 trillion gold market. Hougan noted: “If it “matures” and becomes 50% the size of gold, each Bitcoin will be worth over $400,000.
Second, “Governments will abuse fiat currencies and increase demand for assets of value.” If the market for value-store assets triples due to such mismanagement and Bitcoin maintains its 7% market share, “each Bitcoin will be worth over $200,000.”
He emphasized that these two arguments are independent, but can be combined. “If Bitcoin matures and the market doubles in value, you will quickly reach seven figures. For what it’s worth (FWIW), I think that’s ultimately the most likely scenario,” Hougan said.
Addressing the initial question directly, Hougan stated: “So no, the dollar does not have to crash for Bitcoin to reach $200,000. All you need is Bitcoin to continue on its current path of maturation as an institutional asset.” He added that both factors – the maturation of BTC and the potential abuse of fiat currency – are increasingly occurring simultaneously. “This is why Bitcoin is rising towards all-time highs.”
The discussion continued with Kevin Brent Cook, user X, who added nuance to Hougan’s explanation. “Concise, clear and simple,” Cook noted. “I would only add that the reason a ‘collapse’ is not necessary is because what is meant by ‘fiduciary abuse’ is constant deficit-driven dollar inflation (the United States writes endless checks that never bounce), which naturally causes greater pursuit of the currency of all wealth.”
Hougan agreed with Cook’s assessment, replying succinctly, “I agree.”
At the time of publication, BTC was trading at $72,445, up 23% in the last 20 days.
Featured image created with DALL.E, chart from TradingView.com