Bitwise Chief Information Officer (CIO) Matt Hougan recently shared five interesting predictions for the next halving of the Bitcoin (BTC) network, scheduled for 2028. In a comprehensive report, Hougan sheds light on the potential transformations for the world’s leading cryptocurrency.
New investors and ETFs as catalysts
One of Hougan’s keys predictions is that Bitcoin’s volatility will decrease significantly by 50%. He states that the entry of new investors through the spot Bitcoin exchange rate fund (ETF) market will drive this decline.
Hougan said that as financial advisors, family offices and institutions enter the Bitcoin market, their various investment behaviors — such as portfolio rebalancing and steady trickle-down investments — could introduce countercyclical flows, ultimately dampening Bitcoin’s volatility.
Hougan’s second prediction revolves around Bitcoin allocation in wallets. He believes that 5% allocations to Bitcoin will become commonplace in target-date portfolios. Like that of BTC inconstancy decreases and becomes more attractive to institutional investors, Hougan expects an increase in typical portfolio allocations.
The Bitwise CIO predicts that Bitcoin ETFs will attract more than $200 billion in inflows. He highlights their impressive growth and mentions their status as the fastest growing new ETF category of all time.
Hougan suggests that the ETF market is still in its early stages and national cable houses and institutions have only just begun their due diligence. He draws parallels to the rise of gold ETFs, which saw net inflow growth year over year, and expects a similar trend for Bitcoin ETFs.
Bitcoin price path towards $250,000
In an intriguing projection, Hougan suggests that central banks will allocate money to Bitcoin before the next halving. He notes that central banks have historically been major investors in gold and have accumulated significant amounts of the metal.
However, with the characteristics of Bitcoin as non-debt money and its functional benefits over gold in terms of payments and settlements, Hougan believes central banks will be increasingly attracted to Bitcoin. Hougan further commented on this matter:
There is also an element of game theory in it. A major central bank adopting Bitcoin as a reserve would be a game-changer for Bitcoin and, in my opinion, contribute to a dramatic price increase. Will one central bank try to get ahead of the others?
Hougan’s latest prediction revolves around the price of Bitcoin. He predicts that Bitcoin will trade above $250,000 by 2028, an increase of almost 280% from current levels.
The Bitwise CIO attributes Bitcoin’s previous exponential growth to its transition from a speculative asset to one that is useful in the real world.
Factors such as declining volatility improved storage optionsLow correlations to traditional stocks, improved accessibility through ETFs, and increasing institutional adoption all contribute to Hougan’s optimism about Bitcoin’s future progress. Hougan concluded by saying:
Now that the ETFs have launched and assets are accumulating – and major Wall Street firms are rallying behind Bitcoin – I suspect the assets will continue to move further into the mainstream. At $250,000, Bitcoin would be a $5 trillion asset. Could it be even higher? Naturally. But $250,000 would represent solid progress between halvings, and I think we’ll see that anyway.
Currently trading at $64,500, BTC is down nearly 3% over the past 24 hours after retesting the $67,000 mark on Tuesday and failing to consolidate above that level.
Featured image from Shutterstock, chart from TradingView.com
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