FameEX Hot Topics | Bitwise's Chief Investment Officer Predicts Bitcoin May Surpass $200K This Year Due to High Demand and Limited Supply

Bitwise Asset Management's Chief Investment Officer, Matt Hougan, recently projected that the price of Bitcoin could soar above $200,000 this year, driven by a significant imbalance between supply and demand. In a CNBC interview, Hougan attributed this potential surge to a "massive supply-demand dynamic," highlighting the influx of demand against a backdrop of limited supply. He anticipates a substantial demand spike from spot Bitcoin exchange-traded funds (ETFs), suggesting that Bitcoin is entering a new era of price discovery with the potential for prices to climb considerably higher.

Bitwise's Bitcoin ETF (BITB), among 11 spot Bitcoin ETFs approved by the U.S. Securities and Exchange Commission (SEC) in early January, has seen enormous interest. According to Hougan, this demand spans across retail investors, hedge funds, and registered investment advisors (RIAs), signaling a broad-based appeal of Bitcoin investment through these ETFs. Hougan forecasts a further demand surge as major financial institutions begin to participate, likening the current period to Bitcoin's initial public offering (IPO) moment.

Initially, the demand for these newly launched ETFs came predominantly from retail investors, independent financial advisors, and hedge funds due to the lack of immediate access at major institutions. However, Hougan notes the entrance of funds from both institutional and retail investors into ETFs, dramatically expanding Bitcoin's investor base.

In its 2024 prediction released in December of the previous year, Bitwise speculated that Bitcoin would reach new all-time highs, surpassing $80,000. Yet, based on the observed demand within their ETF and similar products, Hougan believes these estimates may be conservative, suggesting that Bitcoin's price could potentially reach or exceed $200,000. This expectation is rooted in the stark supply-demand dynamic currently characterizing the Bitcoin market, compounded by the upcoming reduction in new supply known as the halvening in April. Hougan emphasizes the simplicity of the current investment scenario with Bitcoin, boiled down to the fundamental economics of supply and demand, where the demand far outstrips the available supply.

Adding to the momentum, a $30 billion investment platform has approved four spot Bitcoin ETFs, including Bitwise's fund. Furthermore, major banks like Bank of America’s Merrill Lynch and Wells Fargo are beginning to offer spot Bitcoin ETFs to certain clients. Bitwise CEO Hunter Horsley also expressed optimism, suggesting Bitcoin's price could reach $250,000 sooner than anticipated, bolstering the bullish outlook on Bitcoin's price trajectory influenced by the growing accessibility and institutional endorsement of Bitcoin investments through ETFs.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.