Bitcoin Could Skyrocket if Governments Embrace It as a Reserve Asset, Says Bitwise

Bitwise Asset Management's CIO, Matt Hougan, has outlined a scenario that could significantly elevate Bitcoin’s value.

Hougan suggested that Bitcoin’s adoption as a reserve asset by governments worldwide could trigger a dramatic price surge.

Hougan believes this possibility isn’t currently factored into Bitcoin’s market valuation. If nations begin holding Bitcoin on their balance sheets, it could drive the cryptocurrency’s value into the hundreds of thousands of dollars.

He explained that the limited supply of Bitcoin would struggle to meet such large-scale demand, pushing prices substantially higher. This shift, according to Hougan, could extend Bitcoin’s bull market into 2025 and beyond, creating a transformative moment for the asset.

Looking ahead to 2025, Hougan predicts a supply crunch. He noted that the Bitcoin network is expected to produce around 160,000 to 170,000 new coins annually. However, recent demand trends far outpace that figure. Corporations purchased 270,000 Bitcoin last year, while ETFs acquired between 400,000 and 500,000. If governments join the race, seeking hundreds of thousands of Bitcoin, the supply deficit could become even more pronounced.

Hougan speculated that this imbalance could lead to a dramatic market reaction. With supply unable to meet growing demand, current holders might only sell at much higher prices. Whether that threshold is $100,000, $150,000, or even $200,000, he envisions a scenario where Bitcoin’s price could leap to unprecedented levels, driven by what he described as a “violent” adjustment in the market.