Matt Hougan believes Bitcoin only needs 17% of a $121 trillion store-of-value market to reach a $1 million valuation.

Bitcoin could reach $1 million if it captures roughly 17% of a projected $121 trillion global store-of-value market, according to Matt Hougan, chief investment officer at Bitwise Asset Management.

In a recent memo, he explained how long-term market expansion could support significantly higher prices for the digital asset.

Math Behind The Target

Hougan said the idea initially appears unrealistic because a $1 million valuation would require Bitcoin to increase roughly 14 times from its current price, a target he himself once dismissed in 2018, when BTC was trading near $4,000.

However, after studying the asset’s role in financial markets, he said the common mistake in evaluating Bitcoin’s long-term potential is treating the store-of-value market as fixed rather than expanding. Hougan described Bitcoin as an emerging digital store-of-value asset that competes with gold by allowing investors to hold wealth outside traditional fiat currencies and banking systems, although he acknowledged that the cryptocurrency remains more volatile and less established than the metal.

According to the Bitwise exec, estimating BTC’s potential value involves calculating the total size of the global store-of-value market, estimating the portion Bitcoin could capture, and dividing that value by the asset’s maximum supply of 21 million units. Based on current figures, Hougan said the store-of-value market totals just under $38 trillion, including about $36 trillion in gold and roughly $1.4 trillion in Bitcoin. This implies that BTC currently represents slightly less than 4% of that market.

Under those conditions, he said a $1 million BTC price would appear unrealistic because the cryptocurrency would need to capture more than half of the existing store-of-value market. He described this scenario as a “high bar.” However, the CIO noted that the market itself has grown significantly over time and may continue expanding. He pointed to the growth of the metal’s market capitalization over the past two decades, and added that when the first US gold exchange-traded fund launched in 2004, the global market was worth about $2.5 trillion.

Since then, the value of gold has increased to nearly $40 trillion, representing a compound annual growth rate of roughly 13%, driven by concerns about government debt levels, geopolitical uncertainty, loose monetary policy, and other macroeconomic factors. Hougan said that if the broader store-of-value market continues growing at a similar pace, it could reach approximately $121 trillion within the next decade.

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Under that scenario, Bitcoin would only need to capture about 17% of the market to reach a valuation of $1 million per BTC. Hougan acknowledged that this would still represent significant growth, as BTC’s current share remains around 4%, but said recent developments suggest that expanding adoption could make such a shift possible.

Key Risks

Despite the optimistic outlook, Hougan said there are risks that could prevent the scenario from unfolding. He noted that the store-of-value market may not continue growing at the same pace seen over the past two decades, which included events such as the global financial crisis, the widespread adoption of quantitative easing, and a prolonged period of low interest rates.

A slowdown in those trends could also lead to declining gold prices. Another possibility is that Bitcoin fails to capture additional market share.

At the same time, Hougan said it is also possible that current projections underestimate the asset’s potential if concerns about rising government debt intensify and investors increasingly turn to alternative stores of value. Under his base-case scenario, he said the store-of-value market would continue expanding while Bitcoin gradually increases its share. He added that such a combination could result in prices far above current levels.