Bitwise Executive Predicts Bitcoin at $250,000 by Next Halving

Matt Hougan, Chief Information Officer at Bitwise, has made five predictions leading up to the next Bitcoin halving, scheduled for April 2028.

The executive noted the difficulty of maintaining perspective amidst a flood of news. He suggested recalling key events from the past four years:

• Bitcoin ETFs were approved in several markets, including the US;
• BlackRock and other major TradFi firms entered the crypto industry;
• Coinbase became a public company;
• Hundreds of global brands launched crypto initiatives;
• The market capitalization of stablecoins reached $150 billion;
• Major platforms integrated AML/KYC measures.

“Of course, there were setbacks—recall FTX, Genesis, BlockFi, and so on. But by any measure, we are a much larger, more mature, and institutional industry today than in 2020. That’s why the price [of Bitcoin] has risen by more than 700% over four years,” stated the Bitwise CIO.

Bitcoin Volatility to Decrease by 50%

Hougan observed that the volatility of the leading cryptocurrency has been declining for many years and is likely to continue. The primary driver is spot Bitcoin funds: 

“ETFs attract new types of investors to the crypto market—financial advisors, family offices, institutions, etc. These investors behave differently than retail investors, who have dominated Bitcoin until now.”

The executive suggested that institutional participants are more likely to rebalance their portfolios (selling high, buying low) and make stable investments (monthly, quarterly). This leads to the emergence of “countercyclical flows,” which reduce volatility.

Bitcoin in Portfolios

With the arrival of major players and reduced volatility, the leading cryptocurrency will become a more popular investment tool, Hougan believes. 

In the future, according to the Bitwise CIO, the volume of Bitcoin in traditional market participants’ portfolios could grow to 5% or more.

“I would advise taking a closer look at target-date and target-allocation portfolios in the US. Today, Bitcoin is hardly present in such packaging, but the situation will change in the coming years,” he added.

Hougan also noted that in the Canadian fund ETF All-in-One Growth ETF by Fidelity Canada, the share of digital gold currently stands at 4.1%.

Billions in ETFs

Since the launch of spot exchange-traded funds based on the leading cryptocurrency in the US, just over three months have passed. During this time, the instruments have attracted a total of $12.5 billion, Hougan emphasized.

He is confident that this is just the beginning. One reason for the delay is that ETFs have not yet gained widespread adoption in institutions like Morgan Stanley and Merrill Lynch. 

“The story with funds also supports the view that a wave of capital is just approaching. Net inflows into ‘gold’ ETFs grew year after year for seven consecutive years after the first one debuted in the US in 2004. Something similar can be seen with Bitcoin,” explained the Chief Information Officer.

Central Banks to Buy Bitcoin

Central banks are major investors and buyers of gold, holding about 20% of the precious metal reserves. Hougan predicts that central banks will begin accumulating the leading cryptocurrency before the next halving.

“Like gold, Bitcoin is non-debt money—an asset whose supply cannot be expanded through borrowing. They also cannot be confiscated by a foreign government […]. Bitcoin is more functional than gold in terms of payments and settlements,” added the Bitwise representative.

The first major central bank to adopt Bitcoin as a reserve asset would “change the rules and contribute to a sharp rise in prices,” Hougan is convinced. 

BTC > $250,000

The expert believes that since the last bullish cycles, Bitcoin has significantly transformed from “primarily a speculative product to an asset with real utility.”

Among the main positive factors, he highlighted the reduction in historical volatility, more sophisticated storage options, low correlation with stocks, ease of access through ETFs, and widespread institutional adoption. 

Therefore, Hougan expects Bitcoin to reach $250,000 in the next four years: 

“At a price of $250,000, the coin’s market capitalization would exceed $5 trillion. Could it go even higher? Certainly. But $250,000 would signify significant progress between halvings.” 

Back in April, the Bitcoin network underwent its fourth halving. The reward for a mined block was reduced from 6.25 BTC to 3.125 BTC.

Analysts at QCP Capital stated that the post-halving effect will manifest at least two months later.