Bitwise CIO Matt Hougan: Growth Holds AI Inflation Holds Bitcoin
Bitwise Chief Investment Officer Matt Hougan stated in CoinDesk's "Markets Outlook" that Bitcoin reaching $1.3 million by 2035 is "relatively easy," providing a portfolio formula: the U.S. should hold AI-related assets to digest debt through growth, and hold Bitcoin to digest debt through inflation; to cover both paths, one should hold both.
Its long-term price anchor comes from the segmentation of the store of value market rather than short-cycle trading. He repeatedly used the same set of algorithms: the market value of gold has expanded from about $2 trillion when gold ETFs were created in 2004 to about $30 trillion, an annualized growth of about 13%; if the store of value pool continues to expand at this rate for another ten years, Bitcoin could capture 25% of it, making each Bitcoin worth about $1.3 million. He also calculated another pathway: global institutional assets are about $100 trillion to $200 trillion, and a 1% allocation would be sufficient to support this target.
The macro fork aligns with U.S. Treasury Secretary Scott Bessent's topic: federal debt is approaching $40 trillion, needing to maintain GDP growth above 3% while also reducing the deficit. If growth materializes, productivity will expand along with profits from chips, data centers, and software; if growth fails, inflation will reduce real debt, with Bitcoin, fixed at a supply of 21 million coins, marked as a hedge against fiat currency dilution.
He used institutional behavior to support the notion that "it's not hard to achieve." Bitcoin spot ETFs are expected to see net inflows of about $60 billion from January 2024 to October 2025; thereafter, prices may retract by about 50%, with net outflows from ETFs being less than $10 billion. After channels like Morgan Stanley and Wells Fargo open up, he wrote that advisors, family offices, pensions, and sovereign funds will be the next stage of buyers, rather than retail leverage.
He also referred to the traditional 60/40 portfolio as "100% fiat currency," stating that having zero Bitcoin exposure is itself a mismatch, and believes there is a chance to recover to $100,000 within the year. Concurrently reported is the trading of AI hardware: when paraphrasing his views in English, he specifically mentioned Micron's significant rise this year and AMD's doubling in the same period, as evidence that "growth paths" are already partially priced into stock prices.
In market mechanisms, buyers are purchasing two macro insurances: the growth path buys computing power and software profits, while the inflation path buys non-inflatable settlement assets. What is being sold are purely nominal bond durations and a single bet on successful fiscal consolidation. Funds are shifting from government bonds and cash into ETF channels, corporate treasuries, and tech equities. Beneficiaries are issuers of spot products like Bitwise and the chip supply chain, while those under pressure are long-duration government bond holders and short accounts still treating Bitcoin as a high-beta tech stock.
Supplementary data: In English market reports, Bitcoin was around $77,000, with a total market cap of about $1.5 trillion, which, relative to its 25% store of value share assumption, still only accounts for a small fraction of the gold store of value pool.
Source: Public information
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Hougan wrote $1.3 million as "conservative," using the same store of value model he provided to institutional clients, rather than new on-chain signals. As an issuer of Bitcoin and alternative asset ETFs, Bitwise's CIO publicly stating a price is part of product distribution: first using the twenty-year market value expansion of gold ETFs as a comparable template, then writing 1% institutional allocation as the numerator, with the denominator fixed at 21 million coins. He previously mentioned a twenty-year scale of about $6.5 million, changing the premise to ongoing global debt and currency depreciation, rather than accelerated rates.
The capital pathway rewrites the Treasury Secretary's dilemma into a sellable binary option. The growth scenario pushes funds toward capital expenditures along the Nvidia chain, while the inflation scenario directs funds toward spot ETF purchases; "holding both" reduces the difficulty for clients to guess policies and lowers the redemption risk for issuers betting on a single narrative. After the ETF absorbs about $60 billion from 2024 to 2025, only less than $10 billion flowed out during the retraction, which he explained as the stickiness of pension and advisor channels, also serving as live advertising for the next round to sell to sovereign funds and family offices.
Comparable objects are gold ETFs after 2004 and MicroStrategy's corporate treasury under the "digital gold" narrative during the same period. In terms of industry positioning, Bitcoin has moved from retail cycle trading into competition for allocation products: the competitors are no longer altcoin seasons, but gold, inflation-protected bonds, and cash management. Hougan admits to having missed the four-year cycle judgment but writes institutional "diamond hands" as evidence of cycle failure, effectively transferring pricing power from halving calendars to balance sheets.
The structural change is the transfer of pricing power. The mechanism is that sovereign debt is so large that it cannot be cleaned up by one-time tax increases; policies must oscillate between "using AI to inflate nominal growth" and "using inflation to reduce real liabilities"; equities benefit from productivity, while Bitcoin benefits from loosening currency anchors. Whoever can simultaneously bundle these two cash flows will sell insurance on the $40 trillion debt fork, rather than selling faith.
ABAB News · Cognitive Law
Debt has only two paths: enlarge the denominator or shrink the currency
Guessing the policy correctly is not as good as holding both answers simultaneously
When the store of value pool expands, a 1% institutional allocation can rewrite the numerator