As a seasoned researcher with over two decades of experience in the financial markets, I have witnessed the ebb and flow of various asset classes. Having closely followed the meteoric rise of Bitcoin since its inception, I find myself increasingly intrigued by Matt Hougan’s perspective on the digital currency’s potential price trajectory.
According to Bitwise’s Chief Investment Officer Matt Hougan, an increasing interest in assets that retain value over time (store-of-value assets) and ongoing depreciation of traditional currencies could potentially drive the price of Bitcoin to six figures. This rise might occur even if the U.S. dollar itself does not experience a collapse.
In an Oct. 29 post to X, Hougan addressed a question he’d received from a financial advisor, which asked whether or not Bitcoin could reach a value of $200,000 without some kind of US currency collapse. “When you invest in Bitcoin, you’re actually making two bets at once,” said Hougan in a post in response to the question.
He said that Bitcoin (BTC) will succeed in establishing itself as a “new store-of-value asset” while governments will continue to “abuse fiat currencies” — something that will naturally result in increased demand for hard assets like BTC.
According to Hougan, although two arguments tackled the initial query, they were actually two distinct aspects, each with its own possible cost implications.
Bitcoin’s current market capitalization of approximately $1.4 trillion comprises about 7-8% of the $18 trillion market cap of gold. However, according to Hougan, Bitcoin could potentially grow and reach half of gold’s total value, which would equate to one Bitcoin being worth around $400,000.
He added that because governments are currently “abusing” their control over the supply of fiat currency through money printing, more investors will be inclined to own store of value assets.
Should Bitcoin maintain its current 7% market value compared to gold, and if the demand for Bitcoin increases threefold independently, an individual Bitcoin could potentially reach a value of approximately $200,000.
Essentially, he pointed out that these points accumulate. If Bitcoin develops and the value storage market doubles, you can easily reach seven figures in a short time.
“I think this is the most likely scenario eventually.”
There’s been a significant surge in interest for conventional assets that maintain value over time, such as gold, due to escalating global economic uncertainties and heightened geopolitical conflicts, particularly in the Middle East. On October 29, gold prices reached an unprecedented peak of $2,778 per ounce.
Moreover, as per a report dated October 29 by Financial Sense, an institutional investor news outlet, it’s expected that continued devaluation of the dollar could become a significant aspect of the U.S.’s industrial policy.
The report suggests that economists Marc Fasteau and Ian Fletcher advocate for a strong American industrial policy as a means to maintain competitiveness on a global scale, specifically against China.
They suggested that the policy “ought to encompass measures for fostering emerging technologies, safeguards against unfairly subsidized competition, and collective actions aimed at reducing the U.S. dollar’s value,” according to their statement.
Multiple financial analysts predict that Bitcoin could set a fresh record price in the upcoming weeks, as it nearly touched its previous all-time high in March during trading on October 29th. According to statistics from CoinGecko, it reached $73,562 at that time.
The asset had since retraced slightly and is trading for $72,392 at the time of publication.
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2024-10-30 09:16