Bitwise Chief Investment Officer Matt Hougan dropped a bold revision during a recent market talk: Bitcoin's 2035 valuation "probably should be $2.3 million," far above the firm's earlier $1.3 million target. The upgrade isn't a bullish whim—it's a fundamental framework shift. Hougan and Head of Research Ryan Rasmussen argue Bitcoin is no longer just "digital gold" but also an out-of-the-money call option on becoming a global settlement asset, a bet that has moved significantly closer to being in the money after the Iran conflict.
Two Stories Converge: The Digital Gold + Settlement Option
Hougan explained that Bitwise always framed Bitcoin as a store of value with a tail call option for international settlement. They rarely discussed the latter with institutions because it felt too distant. But when Iran proposed using Bitcoin to pay canal tolls, and the U.S. froze Russian assets—shattering trust in dollar-denominated reserves—the implied probability of Bitcoin as settlement currency jumped from 2% to 15-20%. "Any options trader would buy this call for the massive premium expansion," Rasmussen added. Even without full adoption, a higher probability alone can boost Bitcoin's market cap, Hougan argued.
Geopolitical fractures, he said, never fully heal. Countries will think twice before parking wealth in a single political currency. This non-political store narrative is gaining traction at the institutional level, though still largely undiscussed in boardrooms.
Q1 Data Paints a Grim Picture, but News Flow Tells a Different Story
The first quarter looked dreadful: every major crypto asset saw double-digit declines, crypto equities tanked, and on-chain metrics plummeted. The only bright spot was stablecoin growth. Yet the news cycle was overwhelmingly positive—Morgan Stanley launched a Bitcoin ETF, Goldman Sachs followed, and the SEC published a token framework. Hougan stressed that data is backward-looking while news is forward-looking. The divergence set the stage for a Q2 rebound, as markets bet that fundamentals would catch up.
Rasmussen noted that since the Iran conflict served as the quarter's midpoint, crypto has outperformed other major asset classes. Short-term volatility masked impressive year-over-year growth in core metrics.
RWA Explosion: From $2 Billion to Nearly $30 Billion
Real-world asset tokenization (RWA) was the standout trend. Two years ago, barely $2 billion in assets were tokenized; today that figure approaches $30 billion—a 10x jump. The asset class has diversified from treasuries and gold to credit, securities, and commodities. Hougan expects the chart to keep moving up and right, with categories broadening.
Avalanche led the pack, with RWA growing nearly 1,000% year-over-year. Bitwise launched BAVA, a product focusing on Ethereum, Solana, and Avalanche—the three L1 architectures it believes will dominate as the L1 market scales from $20 billion to an estimated $600 trillion.
Regulatory Shift + AI = A New Token Boom
Hougan predicts a new ICO wave within 18 months—but this time with proper conditions in place. SEC Chair Paul Atkins, a former token lobbyist, favors tokens that capture real value. Combined with high-performance blockchains like Hyperliquid and AI's ability to amplify productivity, the old failed models (cold-start incentives, DeFi scalability) now have a compliant and technological foundation.
"The ideas we tested in 2018, 2020, and 2021 were good—just bad timing," Hougan said. He warned that many will be caught off guard because the market still equates tokens with scams. The convergence of regulation, scalable infrastructure, and AI sets the stage for what he calls "a new era of token innovation."
Bottom line: Bitwise sees geopolitics pushing Bitcoin's settlement premium higher, while RWA and AI unlock a new application layer—a dual inflection point for the entire crypto ecosystem.