Bitwise CIO Matt Hougan Predicts Trillions in Institutional Capital Will Flow Into Bitcoin

Bitwise Chief Investment Officer Matt Hougan forecasts that institutional investors could channel trillions of dollars into bitcoin over the next decade as the cryptocurrency solidifies its position as a mainstream financial asset. Bitwise, which manages one of the SEC-approved spot bitcoin ETFs (BITB), sits at the center of this transition from retail-driven crypto markets to institutional adoption.

Speaking to CoinDesk in an email interview on Friday, Hougan said that financial advisers and family offices will be the first professional investors to allocate at scale. Evidence of this shift is already visible in 13F filings — the quarterly SEC disclosures required from investment managers overseeing $100 million or more — which show growing positions in spot bitcoin ETFs. The January 2024 regulatory approval of those ETFs removed a long-standing barrier for fiduciaries who needed a regulated wrapper to gain bitcoin exposure, and recent moves by major wealth management firms — including Morgan Stanley and Wells Fargo — to make bitcoin more accessible to their clients signal that distribution channels are opening further.

Over time, Hougan expects demand to broaden to even larger pools of capital: foundations, endowments, pension plans, insurance companies, sovereign wealth funds, and ultimately central banks.

"It's a process that will take 10+ years," Hougan said.

The Scale of Institutional Capital

The magnitude matters. These institutions collectively control between $100 trillion and $200 trillion in assets globally, Hougan noted. A mere 1% allocation to bitcoin would be sufficient to support his long-term price targets.

Hougan's $1.3 million per coin bitcoin price target by 2035 is based on the cryptocurrency capturing a 25% share of an expanding store-of-value market. For context, gold's market capitalization has grown from approximately $2 trillion when gold ETFs launched in 2004 to roughly $30 trillion today. If the store-of-value market continues expanding at its historical 13% annual pace for another decade, bitcoin claiming a quarter of it would result in a per-coin price of $1.3 million.

"When people value bitcoin, they often talk about it as competing with gold for the 'store of value' market. They say something like: Gold is a $30 trillion asset. If bitcoin can take 50% of the market, each bitcoin will be worth $715,000," Hougan said.

"Institutions have most of the money in the world," he added. "Crypto grew up in retail, which took it from $0 to $2 trillion. But if it wants to get from $2 trillion to $20 trillion, it's going to be institutional capital that leads the way."

Strategy's Evolving Role

Strategy, formerly known as MicroStrategy, has been one of the most aggressive bitcoin buyers for years and is the world's largest corporate holder of BTC with 842,138 coins, even after some modest recent sales. However, Hougan believes the company will no longer serve as bitcoin's primary demand driver.

Hougan explained that Michael Saylor and his team built their bitcoin-buying machine by exploiting two capital-market dislocations. First, investors once treated Strategy's stock as one of the few avenues for public-market crypto exposure, enabling the company to sell shares at a premium to the value of its underlying bitcoin holdings. Second, Strategy used convertible debt and preferred-stock offerings to raise additional capital for purchases.

Both advantages have since weakened, according to Hougan. Spot bitcoin ETFs now provide a direct investment alternative, making it harder for Strategy to sustain a premium to net asset value. Meanwhile, the company has already issued as much debt as markets are willing to support against its existing capital stack.

"The easy paths to accumulation have been exhausted," Hougan said. He expects Strategy to continue buying bitcoin, but at a slower pace and in a manner more closely tied to the price cycle.

A Long-Term Perspective

For long-term investors, Hougan argued, the relevant question is not whether bitcoin has found a local bottom.

"The much better question is if the top is in," he said.

Looking ahead, Hougan expects future demand to be driven less by corporate buyers like Strategy and increasingly by large institutional players — pension funds, endowments, insurance companies, and sovereign wealth funds — particularly as spot bitcoin ETFs lower the barriers to entry for traditional finance. The pace of that shift will hinge on regulatory clarity, custodial infrastructure maturation, and whether fiduciary frameworks continue to accommodate digital assets.

Source: CoinDesk