Hougan on the Bitcoin Market

Since the launch of the first Bitcoin-based ETFs in January 2024, institutional interest in the cryptocurrency market has grown significantly. So far, however, this has not translated into a sharp increase in Bitcoin’s price. According to Matt Hougan, Chief Investment Officer at Bitwise, this situation is unlikely to last.

Hougan believes that if ETF-driven demand remains strong over a longer period, Bitcoin’s price could eventually surge. He points to the example of gold, whose price stayed relatively stable for several years despite growing demand, only to later enter a phase of rapid appreciation.

After 2022, central banks began increasing their gold purchases in response to the United States freezing Russian reserves. Annual purchases rose from around 500 tons to roughly 1,000 tons and have remained at that level ever since. Despite this, gold prices did not rise dramatically for quite some time. In 2022, gold gained just 2 percent, followed by 13 percent in 2023 and 27 percent in 2024. It was only in 2025 that prices jumped sharply, by around 65 percent.

According to Hougan, this delay occurred because the market was able to absorb the growing demand for a period of time. Once supply could no longer keep pace, prices adjusted rapidly. In his view, a similar mechanism could play out in the Bitcoin market.

Since the launch of Bitcoin ETFs in January 2024, these funds have been purchasing more than 100 percent of newly mined Bitcoin. This means they are absorbing all new supply—and more. Total net inflows into these ETFs had reached approximately $56.52 billion as of January 13. Bitcoin’s price has not yet risen dramatically, as long-term holders remain willing to sell their holdings. Hougan argues that once this supply is exhausted, the market could enter a phase of strong growth.