Trillions of dollars could converge on bitcoin over the next decade. This projection, put forward by Matt Hougan, chief investment officer at Bitwise Asset Management, illustrates the acceleration in institutional adoption of cryptos. Far from a simple speculative scenario, the development of ETFs and regulated investment vehicles is pushing the largest asset and wealth managers to gradually integrate bitcoin into their allocation strategies. A dynamic that could permanently redefine the valuation prospects of the crypto market.
In brief
- Bitwise anticipates the injection of trillions of dollars over the next ten years.
- An allocation of just 1% of the global institutional pool would support this price by 2035.
- The calculation is based on capturing 25% of a growing store of value market.
- The gradual integration of these capitals aims to transform Bitcoin into a permanent global reserve asset.
Bitwise financial modeling
As BPI 110 enters its decisive phase, rigorous mathematical modeling is at the heart of Matt Hougan’s recent statements. This model is based on precise macrofinancial data and a direct historical analogy:
- The volume of institutional capital: estimated between $100,000 and $200,000 billion globally;
- The target allocation: an injection of just 1% of this money supply into bitcoin would be enough to support the trajectory towards $1,300,000 per coin by 2035;
- An analogy with physical gold: when the first Gold ETFs were launched in 2004, the precious metal market represented $2,000 billion, compared to around $30,000 billion today;
- Overall growth of the sector: the analysis projects continued expansion of the safe haven market at a historic rate of 13% per year;
- Target market share: Achieving the $1.3 million target is based on the assumption that bitcoin will capture 25% of this expanded store of value market over the next ten years.
The argument is not based on a surge or on an irrational enthusiasm of the individual market, but on the mechanical reality of the algorithmic scarcity of bitcoin in the face of a stock of institutional capital in search of diversification assets. Thus, capturing these market shares against physical gold constitutes the central pillar of the fundamental evaluation proposed by the American asset manager.
A sequence of staggered adoption by institutional investors
The deployment of these trillions of dollars will not be done uniformly, but according to a strict timeline dictated by management mandates and regulatory requirements. Matt Hougan explicitly emphasizes that this is a very long-term deployment, stating: “this is a process that will take upwards of 10 years.” The first wave of adoption, currently underway, is being led by independent financial advisors and family offices, as evidenced by quarterly Form 13F filings with U.S. regulators. This movement is amplified by the initiatives of banking giants such as Morgan Stanley and Wells Fargo, which are gradually facilitating access to Bitcoin ETFs for their wealthier clients.
Later waves will involve entities with longer and more conservative decision-making processes, including endowments, foundations, insurance companies, pension funds, and ultimately, sovereign wealth funds and central banks. Thus, the gradual integration of these large players requires in-depth compliance checks and regulatory adjustments that will be spread over several financial years.
The end of the Strategy era as the main driver of demand
Alongside this staggered arrival of new investors, the market is experiencing a fundamental realignment of its historic demand drivers, embodied by the evolving role of Strategy. While recognizing the major contribution of the company led by Michael Saylor, which remains the largest institutional holder with 842,138 BTC, Bitwise believes that the entity will no longer constitute the primary driver of overall demand. Strategy’s ability to issue convertible debt and maintain a significant premium to the equity value of its assets is diminishing as the market matures and offers direct liquid alternatives like cash ETFs.
Although the company continues to accumulate bitcoin, the pace of its acquisitions is expected to slow and align more closely with the asset’s traditional price cycles. The distortions on the capital market that Strategy was able to take advantage of are now reaching their structural limits due to the maximum absorption capacity of the bond market for this type of business setup.
This shift towards a market dominated by a diversified institutional investor base indicates a gradual reduction in extreme volatility in favor of deeper liquidity. For market participants, understanding this paradigm shift involves adopting a broader investment horizon.
As Matt Hougan summarizes regarding long-term investor sentiment, the relevant question for institutions is not whether the asset has hit a local low point, but whether the top has been reached. The gradual integration of bitcoin and other cryptos into global strategic allocations could thus definitively transform the status of crypto, transforming it from a speculative instrument to a structural component of the international financial system.
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