Bitwise CIO Predicts Bitcoin’s Maturity at $500,000

A price of $500,000 will signify Bitcoin’s transition into maturity; until then, the leading cryptocurrency remains in its “early stage.” These insights were shared by Bitwise CIO Matt Hougan.

“In my view, $500,000 per coin is the right boundary between the early and late stage for a very simple reason: it is the point at which Bitcoin becomes ‘mature’,” the expert noted.

Hougan emphasized that investing in the leading cryptocurrency currently involves betting on two simultaneous outcomes:

• The demand for savings assets will grow;
• Bitcoin will be increasingly perceived as a savings asset and eventually stand alongside gold.

Regarding the first point, he noted that governments worldwide continue to accumulate debt and devalue their currencies, increasing demand for gold and, prospectively, cryptocurrency.

The second bet, according to the investment expert, remains uncertain. Until Bitcoin equals gold and becomes a conventional asset for central banks and institutional investors, the “early stage” will persist.

“No one is bothered when institutions allocate funds to gold or when central banks invest billions from their balances. You don’t read tons of skeptical stories in the media about gold, nor do you see sitting US senators rallying armies against gold. Gold has ‘made it’,” Hougan wrote.

He estimates the market capitalization of savings assets to be around $20 trillion. Of this, $18 trillion represents gold, and approximately $2 trillion represents Bitcoin. In its “mature” form, the leading cryptocurrency should at least split this market equally with the precious metal.

Considering the maximum possible number of coins at 21 million BTC, such a balance can be achieved at a price of $500,000. For this to happen, according to Hougan, central banks must start investing in cryptocurrency alongside gold.

“Today, governments own about 20% of the world’s gold reserves compared to less than 2% of all Bitcoins. To bring Bitcoin closer to the $500,000 level, we need to narrow this gap,” the expert concluded.

BlackRock CEO Larry Fink believes that the leading cryptocurrency already serves as a worthy alternative to traditional investments in exchange-traded commodities, including gold, and this acceptance will only expand. He compared Bitcoin’s current dynamics to the early period of the mortgage market, which reached a capitalization of $11 trillion. 

Earlier, former BitMEX head Arthur Hayes stated that Donald Trump’s policies could lead to a dollar collapse and push Bitcoin to $1 million. 

In late October, Hougan suggested that Bitcoin could rise to $200,000 even without the collapse of the US currency system.