Bitwise: Why Is Bitcoin Inevitably Headed Toward $1 Million?

By Matt Hougan, Chief Investment Officer, Bitwise

Translated by Saoirse, Foresight News

A few days ago, a financial advisor asked me: “Matt, do you really think Bitcoin could reach $1 million per coin? That number sounds insane.”

I understand where he’s coming from. $1 million does sound outrageous—implying Bitcoin would need to rise roughly 14-fold from its current price.

Back in 2018, when I joined the crypto industry full-time, I’d have laughed at such a claim. At the time, Bitcoin traded around $4,000; even to me, a $1 million target seemed utterly absurd.

But I no longer think that way. The deeper I’ve studied this asset, the more I’ve realized that—like my financial advisor friend—I made a very basic error in assessing Bitcoin’s potential.

In this week’s memo, I’ll explain that error and show how a set of quite conservative assumptions can lead to a $1 million Bitcoin price.

How to Estimate Bitcoin’s Value

I view Bitcoin as an emerging store of value—an asset whose function is similar to gold: enabling people to hold wealth outside traditional fiat currencies and banking systems, albeit in digital form. It’s more volatile and has a shorter history than gold, yet it’s competing directly with gold for the same market.

Within this framework, estimating its value is conceptually straightforward:

• Estimate the total size of the store-of-value market;
• Estimate Bitcoin’s potential market share;
• Divide by 21 million (Bitcoin’s maximum supply).

That yields its implied price.

Today, the global store-of-value market stands near $38 trillion:

• Gold: $36 trillion
• Bitcoin: $1.4 trillion

By this measure, Bitcoin currently holds less than 4% of the market.

This is why many consider “$1 million Bitcoin” unrealistic—and why I myself long dismissed it.

At today’s market size, Bitcoin would need over 50% market share to hit $1 million—a daunting threshold.

But most people overlook a critical point: the store-of-value market is not static. In fact, it has expanded dramatically over the past two decades—and I believe this expansion will continue as concerns about fiat currency debasement spread.

A Brief History of Gold

I first paid serious attention to gold in 2004, when the U.S.’s first gold ETF launched. At the time, the entire gold market was worth about $2.5 trillion—barely larger than Bitcoin’s market cap is today.

Since then, it has grown to nearly $40 trillion, compounding at 13% annually. This growth reflects rising concerns about government debt, geopolitical risks, and accommodative monetary policy.

Gold Market Cap, 2004–Present

Source: Bitwise Asset Management, data from the World Gold Council and Bloomberg.

The mistake people make when evaluating Bitcoin’s potential is ignoring this growth trajectory.

If this growth rate continues, the global store-of-value market could reach ~$121 trillion in ten years. At that scale, Bitcoin would need only ~17% market share to hit $1 million per coin.

Going from 4% to 17% remains substantial—but looking back at Bitcoin’s recent progress, this goal is entirely within reach.

Just a few years ago, there were no Bitcoin ETFs in the U.S., institutional holders were scarce, Bitcoin was considered too volatile, and almost no one allocated more than 1% to it.

Today:

• Bitcoin ETFs are the fastest-growing ETFs in history;
• Institutions—from Harvard’s endowment to Abu Dhabi’s sovereign wealth fund—are holding Bitcoin;
• Bitcoin’s long-term volatility has declined, and many professional investors now consider allocations of up to 5%.

The journey is far from over—but under these trends, capturing one-sixth of the store-of-value market within a decade isn’t extreme. It’s simply the natural continuation of existing momentum.

Potential Risks

Of course, we must consider both sides of the argument.

The global store-of-value market may not continue expanding at the pace seen over the past two decades. The last 20 years featured the Global Financial Crisis, quantitative easing, and persistently low interest rates—conditions unlikely to recur identically. Gold prices could decline.

Another risk is that Bitcoin fails to gain further market share.

Yet I believe these scenarios may be overly conservative: as concerns about government debt escalate to crisis levels, the store-of-value market could grow even faster—and Bitcoin’s eventual share a decade from now could well exceed 17%.

In my view, the base case is:

• The store-of-value market continues expanding at its historical pace;
• Bitcoin continues gaining share at its current pace.

This combination would push Bitcoin’s price far above today’s level.

Notes

(1) Longtime readers may recall I wrote on a similar theme in 2023. Since then, my views have become clearer.

(2) Worth noting: Including silver, platinum, and palladium would expand the store-of-value market further—but for simplicity and direct comparability, this piece focuses solely on gold and Bitcoin.