Bitwise CIO Matt Hougan made five predictions for the period leading up to the next Bitcoin miner reward cut, which is scheduled for April 2028.
At first, the top manager noted that “it’s hard to maintain perspective” in a large flow of news. Therefore, he suggested recalling key events over the past four years:
- Bitcoin ETF has been approved in several markets, including the US;
- BlackRock and other major TradFi-firms entered the crypto industry;
- Coinbase went public;
- hundreds of global brands have launched crypto initiatives;
- capitalization of stablecoins reached $150 billion;
- major platforms have integrated AML/KYC.
“Of course, there were failures – remember FTX, Genesis, BlockFi and so on. But by any measure, we are a much larger, more mature and institutionalized industry today than we were in 2020. That’s why the price [биткоина] grew by more than 700% in four years,” said CIO Bitwise.
Bitcoin volatility will decrease by 50%
According to Hougan’s observations, the volatility of the first cryptocurrency has been declining for many years in a row. This will most likely continue in the future. The basic premise is Bitcoin spot funds:
“ETFs are attracting new types of investors to the crypto market—financial advisors, family offices, institutions, etc. These investors operate differently than the retail investors who have dominated Bitcoin so far.”
The top manager admitted that institutional participants more often rebalance their portfolios (sell high, buy low) and make stable investments (monthly, quarterly). This results in “countercyclical flows” that reduce volatility.
Bitcoin in portfolios
After the arrival of major players and a decrease in volatility, the first cryptocurrency will become a more popular investment instrument, Hougan is convinced.
In the future, according to CIO Bitwise, the volume of Bitcoin in the portfolios of traditional market participants could grow to 5% or more.
“I would suggest taking a closer look at target-date and target-allocation portfolios in the US. Today Bitcoin hardly exists in such a package, but in the next few years the situation will change,” he added.
Hougan also noted that in the Canadian All-in-One Growth ETF Fidelity Canada, the share of digital gold is currently 4.1%.
Billions in ETFs
A little more than three months have passed since the launch of spot exchange-traded funds based on the first cryptocurrency in the United States. During this time, the instruments raised a total of $12.5 billion, Hougan emphasized.
He is sure this is just the beginning. One reason for the delay is that ETFs are still not widely adopted by institutions like Morgan Stanley and Merrill Lynch.
“The fund story also supports the view that the capital wave is just getting closer. Net inflows into gold ETFs have risen year-on-year for seven straight years since the first one debuted in the US in 2004. Something similar can be seen with Bitcoin,” explained the CIO.
Central banks will buy Bitcoin
Central banks are major investors and buyers of gold, holding approximately 20% of the precious metal’s reserves. Hougan predicts that central banks will begin to accumulate the first cryptocurrency before the next halving.
“Like gold, Bitcoin is a 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 accept Bitcoin as a reserve asset “would change the rules and cause prices to skyrocket,” Hougan said.
BTC > $250,000
The expert believes that Bitcoin has changed significantly since the last bull cycles, turning from “a primarily speculative product to an asset with real utility.”
He cited lower historical volatility, more sophisticated custody options, low equity correlation, ease of access through ETFs, and widespread institutional adoption as key positive factors.
Therefore, Hougan expects Bitcoin to reach $250,000 in the next four years:
“At a price of $250,000, the coin’s capitalization will exceed $5 trillion. Can he go even higher? Certainly. But $250,000 would mean significant progress between halvings.”
Let us remind you that on April 20, the fourth halving took place on the Bitcoin network. The reward for a found block has been reduced from 6.25 BTC to 3.125 BTC.
QCP Capital analysts said that the post-halving effect will appear in at least two months.
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