Bitcoin would only need to capture about one-sixth of the global “store of value” market—currently dominated by gold—to reach $1 million per coin, according to Matt Hougan.
In a blog post published Tuesday, Hougan said many critics dismiss the $1 million Bitcoin forecast because it would require Bitcoin to absorb roughly 50% of gold’s current market value.
However, Hougan argued that this view overlooks an important factor: the continued expansion of both Gold and the broader store-of-value market.
Since 2004, gold’s total market capitalization has grown at an average annual rate of about 13%, rising from roughly $2.5 trillion to around $38 trillion. Hougan said this growth has been fueled by increasing concerns about government debt, geopolitical tensions, loose monetary policy and other macroeconomic pressures that drive demand for safe-haven assets.
“If this growth rate continues, the global ‘store of value’ market will be [around] $121 trillion in 10 years. At that level, Bitcoin only needs to take 17% of the market to be worth $1 million a coin.”
Hougan pointed to the rising role of institutional investors — including exchange-traded funds, sovereign wealth funds and larger portfolio allocations — as key factors that could drive further growth.
“There’s still a long way to go, but given these underlying trends, the idea that Bitcoin could capture one-sixth of the global store-of-value market within the next decade doesn’t seem far-fetched,” said Matt Hougan.
“As I see it, the base case — that the store-of-value market will continue to grow as it has, and Bitcoin will continue to gain market share as it has — leads you to much, much higher prices than we have today.”
Bitcoin and gold divergence widens
Matt Hougan’s $1 million Bitcoin thesis depends on the asset gradually moving closer to Gold as a store of value. However, recent months suggest the two assets are no longer moving in tandem.
Gold reached a record high of $5,327 per ounce in late January and currently sits just 2.2% below that peak, while Bitcoin is still about 44% lower than its October high.
Meanwhile, billionaire investor Ray Dalio warned in early March that Bitcoin may not be a reliable long-term store of value or safe-haven asset, arguing that gold remains the stronger option.
Dalio also noted that central banks are not accumulating Bitcoin, and suggested the cryptocurrency often behaves more like a technology stock than a traditional hedge.
Similarly, Greg Cipolaro, global head of research at NYDIG, said on March 6 that Bitcoin currently doesn’t appear to be priced as a macro hedge, sovereign risk hedge, or a trade tied to real interest rates or inflation.
“That dynamic helps explain the ongoing frustration around Bitcoin’s failure to ‘act like gold’ despite the digital gold label.”
