Bitwise CIO Predicts $200,000 Bitcoin by 2025 Due to Institutional Demand

Coin WorldFriday, May 16, 2025 1:11 pm ET
2min read

Bitwise's Chief Investment Officer, Matt Hougan, has forecasted that Bitcoin (BTC) will reach $200,000 by the end of 2025. This prediction is grounded in an anticipated supply crunch, which Hougan attributes to the heightened demand from institutional investors. According to Hougan, the supply shock is expected to create a significant imbalance between the limited supply of Bitcoin and the increasing institutional interest, potentially driving the price upwards.

Hougan's prediction is based on the understanding that institutional investors are increasingly looking to Bitcoin as a viable asset class. This shift in perception is likely to lead to a surge in demand, which, coupled with the fixed supply of Bitcoin, could result in a substantial price increase. The supply crunch is a result of the halving events that occur approximately every four years, reducing the block reward for miners and thereby decreasing the new supply of Bitcoin entering the market.

In an interview, Hougan laid out the specific figures driving the forecast. He noted that miners will produce 165,000 BTC this year, but already, publicly traded companies have bought more than that. Additionally, ETFs have seen $6 billion in inflows, and governments are expected to start buying Bitcoin. Hougan believes that this structural difference between demand and supply will eventually exhaust sellers at the $100,000 level, where the market has been stuck, and the next stopping point above that is $200,000.

Hougan's prediction is not without its challenges. The regulatory environment for cryptocurrencies remains uncertain, and any adverse regulatory developments could impact the price of Bitcoin. Additionally, the volatility of the cryptocurrency market means that there is always a risk of price fluctuations. However, Hougan's confidence in the $200,000 target is based on a long-term view of the market, taking into account the fundamental factors that are driving the demand for Bitcoin.

One of the key corporate players driving Bitcoin demand is Strategy. The company has pioneered the BTC reserve strategy and currently holds 568,840 BTC in its corporate treasury. Author and Bitcoin analyst Adam Livingston said recently that Strategy is "synthetically halving Bitcoin" by outpacing the newly mined supply. Livingston added that Strategy has accumulated 379,800 BTC in the last six months and will likely control Bitcoin lending markets if it continues its rapid pace of accumulation.

Strategy's effect on Bitcoin's supply is so pronounced that market analyst Ki Young Ju says Bitcoin's supply is now deflationary, with an annual deflation rate of -2.33%. The increased demand has led some analysts to forecast a $1 million Bitcoin price tag in the coming decade. However, analyst and investor Arthur Hayes recently predicted BTC would hit $1 million in three years. Hayes argued that a deteriorating macroeconomic environment and liquidity injected from central banks will continue to drive prices higher.