Bitwise predicts that Bitcoin will undergo a major transformation

Trillions of dollars may flood into Bitcoin in the next decade.

This prediction put forward by Matt Hogan, chief investment officer of Bitwise Asset Management, reveals the acceleration of institutional acceptance of crypto assets. This is not a purely speculative assumption. With the development of exchange-traded funds (ETFs) and regulated investment vehicles, the world's largest asset managers and wealth managers are gradually incorporating Bitcoin into their asset allocation strategies. This trend may fundamentally reshape the valuation prospects of the crypto market.

Core Points

Bitwise predicts that trillions of dollars will be injected into Bitcoin over the next decade. Only 1% allocation of global institutional funds can support current price levels until 2035. The calculation is based on the assumption of a 25% share of the ever-expanding value store market. The gradual integration of these funds aims to transform Bitcoin into a permanent global reserve asset.

Bitwise's Financial Model

As the Bitcoin Price Index (BPI 110) enters a critical stage, rigorous mathematical models form the core of Matt Hogan's recent remarks. The model relies on accurate macro financial data and direct historical analogies: global institutional capital is estimated to be between US$100 trillion and US$200 trillion; target allocation ratio: only 1% of this amount of funds need to be invested in Bitcoin, enough to support its price to reach US$1.3 million per piece by 2035; analogy with physical gold: When the first gold ETF was launched in 2004, the precious metals market was approximately US$2 trillion, but now it has grown to approximately US$30 trillion; overall industry growth: Analysis predicts that the safe-haven asset market will continue to expand at a historical growth rate of 13% per year; Target market share: Achieve a target price of US$1.3 million, based on Bitcoin's 25% share of this expanded value storage market over the next decade.

This argument does not rely on soaring prices or irrational fanaticism in the retail market, but is based on the mechanical reality between the algorithmic scarcity of Bitcoin and the capital stock of institutions seeking to diversify assets. As a result, seizing market share from physical gold forms the core pillar of the fundamental valuation proposed by the U.S. asset manager.

Phased Admission Process for Institutional Investors

The deployment of trillions of dollars in funds was not accomplished overnight, but was carried out according to a strict timetable set by management authorizations and regulatory requirements. Matt Hogan made clear that this is a very long deployment process, noting: "This process will take more than a decade." The first wave of acceptance is currently underway, driven mainly by the Office of Independent Financial Advisers and Wealth Management, and this has been reflected in quarterly 13F filings received by U.S. regulators. This trend has been strengthened by banking giants such as Morgan Stanley and Wells Fargo gradually opening up access to Bitcoin ETFs for their wealth management clients.

The ensuing wave will involve entities with longer and more conservative decision-making processes, including endowments, foundations, insurance companies, pension funds, and ultimately to sovereign wealth funds and central banks. As a result, the gradual integration of these major players will require comprehensive compliance reviews and regulatory adjustments, which will span several fiscal years.

The end of the era of strategic companies as major demand drivers

As new investors enter in batches, market records show that its historical demand drivers are undergoing fundamental adjustments, reflected in the evolution of the role of "Strategy." Bitwise recognized the significant contribution of the company led by Michael Siler, which as the largest institutional holder holds 842,138 bitcoins, but also estimated that the entity will no longer be the main driver of overall demand. As markets mature and direct liquidity alternatives such as spot ETFs emerge, strategic companies 'ability to issue convertible bonds and maintain significant premiums in net asset values is weakening.

Although the company continues to increase its holdings in Bitcoin, its acquisition pace is expected to slow down and become more synchronized with the traditional price cycle of assets. The capital market distortions that strategic companies once exploited have now touched structural boundaries as the bond market's maximum absorptive capacity for such corporate structures has reached its limit.

This shift to a market dominated by a diversified institutional investor base suggests that extreme volatility will gradually decrease and be replaced by deeper liquidity. For market participants, understanding this paradigm shift means adopting a broader investment perspective. As Matt Hogan said when summarizing long-term investor attitudes, the relevant question for institutions is not whether assets have hit a local bottom, but whether they have peaked. The gradual integration of Bitcoin and other crypto assets into global strategic configurations may eventually completely change the status of crypto assets, transforming them from speculative tools to a structural part of the international financial system.