Institutional Investors Set to Drive Bitcoin Demand, Predicts Bitwise CIO

Bitcoin's demand is likely to be driven by institutional investors rather than corporate buyers in the coming years, according to Matt Hougan, Chief Investment Officer at Bitwise. Hougan estimates that global institutions control between $100 trillion and $200 trillion in assets and predicts that even a small allocation of just 1% of this capital could amount to between $1 trillion and $2 trillion.

This level of institutional demand would support Hougan's long-term Bitcoin outlook, which he expects will take more than a decade to materialize. He bases his $1.3 million price target for 2035 on a separate store-of-value calculation that assumes Bitcoin will increasingly compete with gold and other assets used to preserve wealth.

Hougan argues that the global store-of-value market could continue expanding at its historical rate of about 13% a year, citing gold's growth from $2 trillion in 2004 to roughly $30 trillion today. If this trend continues for another decade, Bitcoin capturing 25% of the expanded market would put the value of each Bitcoin at around $1.3 million by 2035.

Hougan expects institutional capital to become the next major driver of Bitcoin demand, with financial advisers and family offices likely to be among the first professional investors to increase allocations. He notes that the shift is already visible in filings showing exposure to spot Bitcoin ETFs, while major wealth managers such as Morgan Stanley and Wells Fargo have expanded access to Bitcoin for clients.