Bitwise CIO Predicts Bitcoin's Next Halving to Supercharge Growth

Bitwise CIO Matt Hougan predicts significant changes for Bitcoin (BTC) in the next Halving cycle, including a 50% decline in volatility due to new investors and ETFs. Hougan anticipates increased Bitcoin allocations in portfolios and over $200 billion in inflows to Bitcoin ETFs. Additionally, he suggests that central banks may allocate funds to Bitcoin, potentially leading to a price increase above $250,000 by 2028. Hougan attributes Bitcoin's potential growth to decreasing volatility, improved custody options, and growing institutional adoption.

Bitcoin's Next Halving: Predictions from Bitwise CIO Matt Hougan

In a comprehensive report, Matt Hougan, the Chief Information Officer (CIO) of Bitwise, has outlined five significant predictions for the upcoming Bitcoin halving event scheduled for 2028. These predictions shed light on the potential transformations that await the world's leading cryptocurrency.

New Investors and ETFs as Catalysts

Hougan anticipates a substantial decline in Bitcoin's volatility, projecting a reduction of approximately 50%. This decrease is attributed to the influx of new investors through the rapidly growing spot Bitcoin exchange-traded fund (ETF) market.

As financial advisors, family offices, and institutions enter the Bitcoin arena, their diverse investment strategies, characterized by portfolio rebalancing and consistent purchases, are expected to introduce counter-cyclical flows that dampen the cryptocurrency's volatility.

Increased Bitcoin Allocations in Portfolios

Hougan foresees a growing recognition of Bitcoin's value within investment portfolios, predicting that target-date portfolios will commonly include 5% allocations to the cryptocurrency. As Bitcoin's volatility diminishes and its appeal to institutional investors rises, Hougan expects a notable surge in typical portfolio allocations.

ETF Inflows Surpassing $200 Billion

The Bitwise CIO projects that Bitcoin ETFs will witness substantial inflows, exceeding $200 billion in aggregate. He emphasizes their impressive growth trajectory, noting that they have become the fastest-growing new ETF category in history. Hougan draws parallels with the rise of gold ETFs, which experienced consistent growth in net flows over the years, and anticipates a similar pattern for Bitcoin ETFs.

Central Banks' Embrace of Bitcoin

In an intriguing prediction, Hougan suggests that central banks may allocate funds to Bitcoin prior to the next halving event. He highlights their historical role as significant investors in gold, accumulating substantial quantities of the precious metal. However, Hougan believes that due to Bitcoin's non-debt monetary characteristics and its functional advantages over gold in terms of payments and settlement, central banks will be increasingly drawn to the cryptocurrency.

Hougan further elaborates on this matter: "There is also an element of game theory here. A major central bank adopting Bitcoin as a reserve asset would be a game-changer for Bitcoin and, I believe, would contribute to a dramatic increase in prices. Will one central bank try to front-run the others?"

Bitcoin's Price Projection: Above $250,000

Hougan makes a bold forecast, predicting that Bitcoin will trade at a price exceeding $250,000 by 2028, representing a hefty increase of nearly 280% from current levels. The Bitwise CIO attributes Bitcoin's past exponential growth to its evolution from a speculative asset to one with tangible utility in the real world.

Factors such as diminished volatility, enhanced custody options, low correlations with conventional stocks, improved accessibility through ETFs, and growing institutional adoption all bolster Hougan's optimism regarding Bitcoin's future price appreciation.

In conclusion, Hougan expresses confidence in Bitcoin's mainstream adoption: "With the ETFs launched and gathering assets—and major Wall Street firms lining up behind bitcoin—I suspect the asset will continue to move further into the mainstream. At $250,000, bitcoin would be a $5 trillion asset. Could it go higher? Of course. But $250,000 would represent solid progress between halvings, and I think we'll see at least that."

While Bitcoin's current price of $64,500 indicates a slight decline of approximately 3% over the past 24 hours, the cryptocurrency remains poised to make significant strides in the lead-up to the next halving event.