Bitwise CIO Predicts Bitcoin Could Hit $200,000 as Institutional Demand Accelerates
2min read As Bitcoin recovers from a sharp selloff earlier this week, one prominent asset manager is making a bold forecast: the digital currency could double in value by the end of the year.
Matt Hougan, Chief Investment Officer of Bitwise Asset Management, said in an interview on the TALKENOMICS Live podcast that he expects Bitcoin to reach $200,000 by year-end 2025, citing a confluence of strengthening fundamentals, investor demand, and a shift in market behavior.
Ask Aime: What is the catalyst behind Matt Hougan's bullish Bitcoin forecast, and how might it impact the cryptocurrency market in 2025?
“There’s a demand-supply mismatch,” Hougan said. “Bitcoin is being vacuumed up by institutional investors, corporations, and governments. There’s just not that much Bitcoin to go around.”
Bitcoin was trading at $84,719 early Thursday, according to CoinDesk data, a modest rebound after Federal Reserve Chair Jerome Powell on Wednesday signaled a continued pause on rate cuts and concern about balancing the Fed's dual mandate, employment and inflation. That announcement caused a brief risk-off reaction in both crypto and stocks.
As Barron’s reported Thursday, the sentiment in the crypto market has shifted from “extreme fear” to “fear,” with several analysts calling the recent decline a potential bottom. Solana led gains among digital assets, rising 7%, while XRP and Ether also posted positive returns.
Institutional Momentum Versus Macroeconomic Headwinds
Hougan points to a structural change in market dynamics. Historically, Bitcoin has underperformed during equity pullbacks, such as in 2018 and 2022. But in the most recent downturn, Bitcoin kept pace with — or outperformed — the S&P 500, which Hougan interprets as evidence of persistent institutional buying.
However, the longer-term picture is more nuanced. A 2022 report from Goldman Sachs observed that Bitcoin’s performance has historically been highly sensitive to financial conditions and speculative interest, while gold has remained more resilient due to broader non-investment demand.
“Bitcoin is a risk-on, long-duration asset,” goldman sachs analysts wrote. “Its value proposition is tied to future adoption and speculative positioning, whereas gold is supported by jewelry demand, central bank purchases, and its role as a safe-haven asset”.
The report found that Bitcoin’s ability to improve the Sharpe ratio of a traditional 60/40 portfolio depended heavily on exceptional returns. Allocations made six or seven years ago significantly enhanced returns; more recent entries offered little advantage due to persistent volatility.
Gold vs. Bitcoin as a Hedge
Hougan addressed the comparison head-on. “Gold may preserve value, but Bitcoin enhances return,” he said. “You can hedge an entire portfolio with a small Bitcoin allocation, whereas gold only hedges the amount you allocate.”
Goldman’s three-year-old analysis contests that claim. The firm concluded that in periods of tightening financial conditions, Bitcoin’s performance lags behind gold’s due to Bitcoin’s reliance on liquidity and speculative behavior.
“We believe gold’s low correlation with financial conditions makes it a better portfolio diversifier,” the goldman Sachs strategists wrote. “Bitcoin’s volatility remains elevated until it develops real use cases, which are still limited”.
Hougan sees one potential wildcard that could upend the traditional models: U.S. government adoption. He highlighted that the Treasury already holds over 200,000 bitcoin from historic seizures and referenced proposed legislation that would direct the U.S. to acquire even more.
“If the U.S. government starts aggressively buying Bitcoin, dozens of countries will follow,” he said. “That kind of demand shock could push prices well above $200,000.”
Whether that comes to pass is speculative. But Hougan remains confident in Bitcoin’s trajectory, even if he stops short of calling it a certainty.
“There are risks,” he admitted. “But I wouldn’t make the prediction if I didn’t think it had a better-than-even chance.”
As investors weigh inflation, Fed policy, and geopolitical volatility, Bitcoin may continue to attract attention — not just as a speculative asset, but as a hedge against institutional instability. Still, legacy assets like gold remain formidable competitors, particularly in environments where risk appetite fades.
