In a recent post on the X platform, Matt Hougan, director of research at Bitwise Asset Management, has made strong statements about the future of the Bitcoin price.
According to Hougan, the possibility of Bitcoin's price crashing to zero is no longer real.
Hougan responded to CoinDesk senior analyst James Van Straten's comments on the correction that Bitcoin's price has suffered since reaching its current all-time high (ATH) of $99.655 per BTC.
Van Straten noted that the leading cryptocurrency’s price had corrected by around 10% after touching its current ATH and that it would possibly settle above $90.000. Hougan commented on these observations by stating that one of the main drivers of past corrections in Bitcoin’s price had been users’ fear of its value falling to $0. However, he pointed out that this is no longer a real possibility and that the growing institutional demand for the cryptocurrency is ensuring its future.
“The post captures a really important shift: buyers of “value” now exist in bitcoin”, Hougan said.
At the same time, Bitwise's CIO noted that while BTC's volatility has not been abolished, the violence of price pullbacks has clearly been reduced and the massive participation of institutions has had a major impact on this new reality.
Institutional Adoption: The Engine Driving Bitcoin's Price
Hougan argues that institutional adoption is and will likely continue to be the main driver driving Bitcoin’s price higher, despite any corrections the cryptocurrency may experience in the short term. According to the expert, there is a “growing sea of investors” looking for an entry point into Bitcoin, rather than selling their positions as seen in the past when the cryptocurrency suffered violent setbacks in its value.
"We have not repealed volatility, of course, but I do believe that we have reduced the violence of the setbacks.", Hougan said.
Institutional adoption of Bitcoin is a phenomenon that has been growing in recent months, especially since the United States gave the green light to the listing of Bitcoin spot investment funds on the stock market. Since then, large companies and investment funds have started to include Bitcoin in their portfolios as a form of diversification and protection against inflation. This growing institutional adoption has contributed to the stabilization of the Bitcoin price and its consolidation as a legitimate financial asset. In addition, the entry of institutional investors is incentivizing governments to establish greater regulation and transparency in the market, which in turn attracts more participants.
On the other hand, experts have highlighted that institutional adoption of BTC is not only limited to large companies, but rather there is a growing number of individual investors who are entering the cryptocurrency market, attracted by the performance potential and technological innovation that Bitcoin represents. This combination of institutional and retail investors is creating a more robust and resilient ecosystem, capable of withstanding market fluctuations without suffering drastic crashes.
The rise of institutional investment in Bitcoin
In a separate post, Hougan he pointed Hougan said that 95% of the world’s largest investors have no exposure to Bitcoin at present. However, he emphasized that 95% of all Bitcoin to exist in the market is “already owned.” With this statement, Hougan underlined the growing scarcity of the market-leading cryptocurrency, highlighting how institutional demand can further boost its value and relevance in the current financial landscape.
This is crucial to understanding the current context of Bitcoin investment. Even though institutional adoption has gained ground, there is still ample room for growth. However, it should not be forgotten that the scarcity of Bitcoin, which is scheduled to have a maximum supply of 21 million units, means that institutional demand can continue to increase without there being enough supply to satisfy it. This programmed scarcity and institutional demand are factors that contribute to the appreciation of the Bitcoin price in the market.
As such, experts like Hougan have pointed out that as more institutional investors look to diversify their portfolios and hedge against inflation through Bitcoin, competition for the few available units of the cryptocurrency will intensify. This, in turn, may lead to a sustained increase in the price of BTC in the future.
The growing importance of Bitcoin as an investment asset and store of value
The confidence expressed by Matt Hougan reflects the market trend that Bitcoin is consolidating as an attractive option for investors looking to protect their capital and diversify their portfolios. Thus, although Bitcoin's volatility remains a factor to consider, growing institutional adoption has helped mitigate risks and consolidate BTC as a legitimate investment and reserve asset. In addition, its decentralized nature and programmed scarcity make it a unique asset, capable of resisting inflationary pressures and economic uncertainties.
So today, Bitcoin is no longer just a cryptocurrency for transferring or exchanging value, but a financial asset that offers long-term yield opportunities and protection against inflation.
