Bitwise argues that Bitcoin’s real value comes from its role as a digital store of wealth and the protocol’s built-in scarcity, separating that long-term thesis from the usual short-term market noise. Matt Hougan frames institutional flows and regulated investment vehicles as steady sources of demand that keep pushing against Bitcoin’s limited supply. In this view, utility-driven demand consistently outweighs temporary price drops, shaping the asset’s long-term trajectory.
A shift from short-term noise to structural demand
Hougan describes Bitcoin as a self-custodied store-of-value service where ownership itself is the gateway, not a paid subscription or platform license. Because of that model, every unit of utility converts directly into demand for the asset. He highlights how the protocol’s mathematically enforced scarcity acts as a hard cap while global appetite grows for non-sovereign financial assets. In his comparison, Bitcoin behaves less like a company and more like a foundational monetary service whose value stems from its function in investor portfolios rather than operating revenue.
The institutional wave gives this framework even more weight. Hougan points to sustained participation from pension funds, sovereign entities and other regulated channels that simplify institutional exposure. Since the launch of spot ETFs in January 2024, Bitwise positioned its fund BITB as one of the on-ramps: the product held about 40,943.3 BTC as of July 19, 2025, while aggregate acquisitions topped $5.2 billion in just 30 days, reinforcing the idea of persistent demand. (A spot ETF allows exposure to the underlying asset without requiring direct custody.)
Hougan interprets the recent drawdowns as market noise rather than cracks in Bitcoin’s thesis. He mentions two recurring dynamics: a period of “max desperation” among retail investors that often aligns with market bottoms, and a “hidden sell wall” near $100,000, where early holders could be tempted to take profits. Clearing that concentrated supply, he argues, would be a prerequisite for a renewed bullish phase.
He also suggests that the classic four-year cycle has lost influence. As the market transitions from a retail-dominated environment to one powered by institutions, time horizons stretch and dependence on halving-driven supply shocks decreases. The structure becomes less cyclical and more shaped by capital flows and regulatory maturity.
In Hougan’s model, the combination of institutional demand, regulatory approval and fixed scarcity sets the stage for significant appreciation: around $200,000 by the end of 2025 and potentially reaching the low millions by 2035, assuming a compound annual growth rate near 28.3%.
Bitwise’s thesis reframes Bitcoin not as a speculative roller coaster but as a self-custodied value infrastructure supported by steady institutional flows and permanently limited supply. The firm sees 2026 as the next major test, a year that could confirm the beginning of a sustained institutional rally.
