In an exclusive one interview Matt Hougan, chief investment officer at Bitwise Asset Management, shared his confident outlook on Bitcoin with Yahoo Finance, forecasting a significant price escalate by the end of 2025. “We expect Bitcoin to exceed $200,000 by this time next year.” said Hougan, attributing this forecast to three main sources of demand: ETFs, corporate investments and government takeovers.

Hougan explained: “There are ETFs that are sucking up Bitcoin, public companies like MicroStrategy are accumulating Bitcoin, and now we are seeing discussions about governments investing in Bitcoin. Ultimately, it comes down to supply and demand – there is too much demand and not enough supply, resulting in a higher price.

When asked about the sustainability of such demand, Hougan emphasized the gradual awakening of different segments of investors to Bitcoin’s value proposition. “People are just waking up to Bitcoin at different rates. We have seen that retail investors got involved first, then companies and financial advisors, and now institutions recognize that Bitcoin belongs in a diversified portfolio,” he explained.

“Bitcoin is now a multi-trillion dollar global macro asset and virtually every investor should have some exposure. There is still a immense number of investors ahead of us and that is why I believe we are still at the beginning of this journey. We still have many quarters ahead of us,” he added.

How high could the price go if the US buys Bitcoin?

A key aspect of Hougan’s forecast is based on the potential creation of a US Strategic Bitcoin Reserve (SBR). Addressing this issue, Hougan noted: “If we do indeed end up with a strategic reserve of Bitcoin where the government buys Bitcoin, as proposed in Senator Lummis’ bill directing the government to buy a million Bitcoin, $200,000 worth of Bitcoin will look quaint. You will be looking at three four bitcoins worth $500,000. “It’s just too big of a story because it would have to be done by governments around the world.”

Hougan admitted that he was initially skeptical of Trump’s suggestions for establishing an SBR. “But as the months have passed, the problem has not gone away, in fact we continue to see Trump administration leaders suggesting they are open to it,” Hougan noted. Bitcoin’s CIO still believes the chances of the U.S. government purchasing Bitcoin are less than 50%, but “it’s not zero,” he added. “If that happens, or if we start seeing it happen in other countries, there will be a surge in Bitcoin that will make 2024 a pretty good year by comparison.”

Hougan also highlighted the role of institutional platforms, specifically citing Coinbase as a potential major beneficiary in the evolving cryptocurrency landscape. “Coinbase is currently half the size of Charles Schwab, and we believe it has the potential to surpass Schwab in terms of broker size,” he noted.

“Coinbase had no major competitors to challenge it yet; if you can believe it, it’s kind of been taken over by regulators. As a result, he was able to keep margins high at brokerages and then put on things like stablecoins. [..,.] It will also facilitate if it gets into the S&P 500; you can see that institutions are buying it widely. “I think it’s a really unique situation with so much regulatory uncertainty – it’s cleared a thick path for competitiveness, and now it’s going to reap those benefits and build a really, you know, maybe unsalable leadership position in this industry in the NAS market.”

Looking ahead to the broader market, Hougan predicted an influx of cryptocurrency-related companies entering public markets. “We can expect companies like Kraken, Anchorage and Chainalytic to go public, which will further normalize the industry,” he said. “This inflow will lead to increased Wall Street coverage and institutional investment, setting the stage for a robust IPO window in 2025.”

Despite the confident outlook, Hougan admitted that the potential risks could hamper Bitcoin’s development. “The biggest risk is that politicians will not keep their promises – if we do not achieve regulatory transparency or create a strategic reserve, the expected boom may not materialize,” he warned. “Regulatory and political factors are key drivers of cryptocurrency development in 2025, and any setbacks in these areas could pose significant challenges.”

At the time of publication, Bitcoin’s price was $104,212.

Featured image created with DALL.E, chart from TradingView.com