Bitcoin $1.3M, Solana Season Coming? Bitwise CIO Explains

$1.3 million. That's what Bitcoin could be worth in 10 years from now, according to Matt Hugan, CIO of Bitwise. This isn't just a wild guess. It's the result of a detailed bitwise report prepared for institutional clients.

The number of investors who own crypto is rising very rapidly. Bitcoin will take 25% of the store of value market, which includes bitcoin and gold, by 2035. From my perspective, that's actually a very conservative forecast.

In this video, we dive into Hugan's thesis and challenge his main assumptions. We also discuss his bullish outlook for Solana heading into the end of the year. Nothing in this video is financial advice. The Cointelegraph team holds positions in Bitcoin and Solana. First of all, Marci, it's a pleasure to see you.

Thanks for having me. Yeah, I'm excited to be here.

I just want to discuss a recent bitcoin port that you published in August. You said in the report that you predict bitcoin to reach $1.3 million by 2035 with a compound annual growth rate of 28.3%. Can you summarize how we get there?

Yeah, absolutely. Thanks for the question. You know, might be worth starting with why I wrote the report. In traditional finance, one of the biggest things banks do is they publish long term capital market assumptions that predict the long term returns, correlations and volatility of stocks, bonds, real estate, commodities, and other assets. And these are the predictions that institutional portfolio managers use to decide how to build their portfolios. So how much stocks to own, how much bonds to own, how much real estate to own, and how to mix them all together. I've been a bitwise since 2017, and I never had an institutional investor ask me for long term capital markets assumptions about Bitcoin until 2025. And we had over 12 requests from some of the largest platforms on Wall street, people who control trillions of dollars of assets. And the reason is they're now considering bitcoin alongside stocks and bonds and real estate and other asset classes as a fundamental building block. So that's a really important thing. So how did we tackle that problem? Well, you want to do a data driven approach and you want to do a data driven approach that understands what's going on in the broader market. So what's going on in the broader market? Right now, for bitcoin, we have three big factors. One, we have soaring debt and deficits in the US and in other countries around the world. So we have Rising concerns about the risks of fiat debasement. At the same time, we have regulation that has gone from aggressively anti crypto to aggressively pro crypto. And we have institutional investors who now have tools like ETFs that allow them to access this asset class. When you put it all together, you think there's going to be a lot of institutional flows into bitcoin. But how much? The way we got to that $1.3 million price target is we looked at the markets that bitcoin is going after. We think it's going after the store of value market that's dominated by gold. We think it can be used for offshore wealth, which is often tied to real estate or forex reserves. Right now we think it can be used in certain emerging market economies. And we estimated how much of those markets will it have by 2035 and how big will those markets be? The $1.3 million prediction guesses that Bitcoin will take 25% of the store of value market, which includes bitcoin and gold by 2035. From my perspective, that's actually a very conservative forecast. I probably think we could be bigger than gold by that point. But for the purposes of an institutional paper, you want to take a reasonable assumption. And saying will be about 25% of the broader gold market, I think was reasonable. And that just works out to 1.3 million. I think we'll get there and beyond.

I just want to ask a couple of follow up question regarding those thesis. So you expect Bitcoin to reach the same market capitalization of gold by 2035 or at least you think there is a good chance that will happen because bitcoin is gaining traction with its narrative of being digital gold. On the other hand, we know that gold has been around for thousands of years. Wouldn't you say that just a decade of time is enough for relatively new assets like bitcoin to build the same amount of trust? That's for gold. It took hundreds of years.

Yeah, I think that's a very fair question. I mean, one important thing I'd point out is we're actually predicting it only gets to be 25% of the market. So we're predicting it gets to be as big as gold is today. But we think gold is going to continue to get bigger and bigger and bigger. So we're not saying it matches gold by 2035. It matches gold's value today, which is about $25 trillion. But the broader market. But it's still a good question. Can bitcoin catch up that much with gold in the future. The things to remember Gold has definitely been around longer, but we've only been off the gold standard for the last 50 or so years. So I think people may overstate the history of gold. The other thing I would say is that if you look at the history of money, the things that made gold the best money is that it's very dense. You can store a lot of wealth in a very small format, and as a result, it's relatively easy to move. But bitcoin, you can store an infinite amount in no format, and you can move it around the world at the speed of light. It's just better than gold at most of the things that gold does.