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Bitcoin continues to cement its status as one of the most exciting investments of the last decade. In a year where it has reached all-time highs, Bitwise Asset Management’s chief investment officer, Matt Hougan, sees an even more promising future for this Cryptocurrency.
According to Hougan, Bitcoin could climb to $200,000 by next year. But… what is driving this forecast and what role would the creation of a “strategic backing” of Bitcoin by the US play?
Bitcoin and global adoption
Hougan highlights that the growth of Bitcoin is a process of gradual adoption. The first to arrive were retail investors and, after them, we saw how companies and financial advisors began to participate. Now, it is the turn of institutions, which are recognizing the place that Bitcoin has as a viable and, above all, necessary asset within modern portfolios.
“When people and organizations realize that Bitcoin is not going away, that it has a legitimate role in the global economy, they must act,” Hougan said. This has created a cascade of adoptions, where players like BlackRock are now recommending exposure close to the 2% of total portfolios in Bitcoin. This change in the perspective of large global players not only validates the trajectory of cryptocurrency, but also accelerates its adoption.
Education and market participation
Bitcoin’s growth is not only about capital, but also about knowledge. Hougan mentions that a key factor behind this wave of adoption is the “educational breakthroughs” that help demystify how this cryptocurrency works. Lack of understanding has historically been a major obstacle, but that barrier is disappearing.
Education about the benefits of Bitcoin, such as its ability to act as a store of value and its decentralization, leads investors to abandon zero exposure (“going to zero”) and begin including it in their portfolios. This trend is not only limited to individuals, but also corporate giants and financial institutions.
What is a “strategic backing” of Bitcoin and why would it boost its price?
One of the most interesting aspects Hougan mentions is the possibility of the United States adopting a Bitcoin-based strategic backstop. While the concept has not yet been widely discussed in Washington, this idea could represent a significant boost to the price of the cryptocurrency.
Basically, a strategic backstop would involve the US government acquiring and setting aside Bitcoin as part of its economic strategy, in a similar way to how other countries manage gold reserves.
This would have massive implications for the market. Not only would it completely legitimize cryptocurrencies from a government perspective, but it could also drive up demand and therefore the price. According to Hougan, such an initiative could position Bitcoin at unprecedented valuation levels.
ETFs and companies that lead the market
Bitwise Asset Management, the firm led by Hougan, has been a pioneer in structuring exchange-traded funds (ETFs) based on Bitcoin and other cryptocurrencies, such as BITB, BITC and BITW. These products are designed to facilitate access for investors seeking exposure to the crypto market without the need to directly manage digital assets.
Additionally, Hougan expressed optimism about the growth of crypto giants like Coinbase Global (COIN), stating that platforms like these have a bright future aligned with the growth of Bitcoin and the widespread adoption of cryptocurrencies.
The future of Bitcoin?
The path to $200,000 projected by Hougan is not a simple bet, but a vision based on visible facts. Growing adoption by institutions, validation by giants like BlackRock, educational advancements, and the possibility of the US strategically backing Bitcoin paint a bullish picture.
In a world still adapting to new financial technologies, Bitcoin is proving to be more than a fad. It is a paradigm shift that could transform markets, governments and investments globally. Is the world ready for that change? It seems that some already are.
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