Bitwise CIO Matt Hougan argues that a $1 million Bitcoin is not an extreme assumption if investors stop treating the store-of-value market as fixed. In his latest memo, he says the common mistake in Bitcoin valuation is focusing only on current market size and current share.
Hougan frames Bitcoin as an emerging digital store-of-value asset, comparable in function to gold because it lets investors hold wealth outside the fiat system and traditional banks. From that starting point, he uses a simple formula: estimate the size of the global store-of-value market, assign Bitcoin a potential share of that market, and divide the result by Bitcoin’s hard cap of 21 million coins.
At today’s market size, the math looks difficult
Using gold and Bitcoin together as the addressable market, Hougan places the current store-of-value sector at just under $38 trillion. Gold accounts for about $36 trillion, while Bitcoin stands near $1.4 trillion. That leaves Bitcoin with less than 4% of the market.
Under a static-market view, the skepticism is easy to understand. If the total market never grows, Bitcoin would need to capture more than 50% share to justify a $1 million price. Hougan says this is where many valuation discussions stop, and why the target sounds implausible at first glance.
His thesis centers on market expansion, not just share gains
Hougan points to the history of gold to make the case. When the first U.S. gold ETF launched in 2004, the gold market was worth roughly $2.5 trillion, a level he says was not far from Bitcoin’s scale today. Over the following 20 years, concern over government debt, geopolitical uncertainty, and loose monetary policy helped drive gold’s market value at a 13% compound annual growth rate, pushing it close to $40 trillion.
If that same kind of fiat-debasement demand continues, Hougan estimates the global store-of-value market could reach about $121 trillion in 10 years. In that scenario, Bitcoin would only need about 17% market share for the price per coin to move above $1 million.
Institutional adoption is part of the path in his model
Hougan says a move from 4% to 17% is not out of reach given how much Bitcoin’s market structure has changed. A few years ago, there was no U.S. spot ETF and institutional ownership was limited. Now, he says, Bitcoin ETFs have become the fastest-growing ETF products on record, with buyers ranging from the Harvard endowment to the Abu Dhabi sovereign wealth fund.
He also notes that lower long-term volatility has led some professional investors to consider raising Bitcoin allocations to 5%. Hougan does acknowledge risks, including a pullback in gold and competitive pressure from elsewhere in the market. Still, his memo argues that if the store-of-value market keeps expanding and Bitcoin keeps gaining share, the asset’s price can move far above current levels.