- Bitwise CIO Matt Hougan confirmed that 95 percent of Bitcoin is already owned.
- He also stated that 95 percent of global investable money is still not exposed to Bitcoin.
- Hougan believes this supply-demand imbalance could trigger a strong price rally.
Bitcoin (BTC) is at a critical inflection point since scarcity amplifies while demand rises. Bitwise CIO Matt Hougan revealed that approximately 95% of the total available supply of Bitcoin has been issued. At the same time, Hougan said that only a small fraction of total investable capital has been invested in Bitcoin.
The lopsided nature of this situation suggests a significant decrease in supply could drive up the price of Bitcoin. Hougan expects that a fast-growing influx of institutional money into Bitcoin will cause demand to outpace available supply. Scarce supply and increasing demand give the current owners considerable power to drive price fluctuations.
Bitcoin Growing Increasingly Scarce
Bitcoin regularly demonstrates decreasing annual emissions, highlighting its scarcity worldwide. Bitwise mentioned that Bitcoin’s current annual supply growth is only 0.84%, which makes it rarer than gold. With the rate slowing down it’s much harder for new investors to build substantial positions.
A study from Bitwise shows that individuals control more than three-quarters of all Bitcoin compared to institutional investors and ETFs, which hold less than half. As a result, institutions find it increasingly difficult to amass major holdings unless owners decide to divest their investments. Conversely, many long-term believers are reluctant to sell, even as Bitcoin gains popularity.
Bitwise CEO Hunter Horsley considers Bitcoin the rarest and most limited form of global wealth. He stressed that more people want to acquire the asset than the amount released into circulation each year. Institutions attempting to enhance their allocation in Bitcoin face growing challenges because the available supply remains narrow.
Hougan Predicts Sharp Rise in Bitcoin
Investment from institutional players is on the rise as they accelerate crypto purchases. BlackRock’s entry into Bitcoin futures ETFs and Strategy’s accumulation of coins have resulted in Bitcoin’s supply remaining far below institutional inflows.
Michael said the market has only recently entered the expansion phase, as institutions are putting more money into Bitcoin. Due to strong institutional support, Hougan predicted Bitcoin could see a bull run for the next five years. Historically, bullish runs in the Bitcoin market have lasted a shorter period of time compared to current trends.
Hougan predicted that Bitcoin could reach $200,000 by the end of the year as institutional growth continues. Analysts such as Binance’s Changpeng Zhao have predicted that Bitcoin’s price will rise significantly before this cycle ends.
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