Bitcoin is often seen as a potential hedge against the declining value of the U.S. dollar. Some believe that for Bitcoin to reach $200,000 per coin and beyond, there needs to be a collapse of the dollar. However, Bitwise CIO Matt Hougan disagrees with this notion. He believes that Bitcoin can become a six-figure asset class without the need for a dollar crash.
Hougan points to two main factors that can drive the price of Bitcoin higher. The first is the increasing demand for store-of-value assets, with investors seeking alternatives to traditional currencies. The second factor is the continued government spending, particularly in the United States, which has led to a growing national debt that now exceeds $35 trillion.
The Unlimited Funds CIO, Bob Elliott, also supports the idea that Bitcoin can thrive without a dollar collapse. He suggests that traditional safe-haven assets like U.S. Treasuries may no longer be reliable bailout mechanisms, potentially making Bitcoin more attractive to investors.
As the U.S. debt continues to rise and global bond yields increase, experts anticipate more mature Bitcoin markets, wider adoption, and higher prices for the cryptocurrency in the future. Hougan remains optimistic about Bitcoin’s growth potential, stating that the digital asset is on its way to becoming a mainstream institutional investment.
On October 29th, as Bitcoin approached its all-time high, Hougan’s comments coincided with a 5% increase in the price of BTC. While technical analysis points to a potential breakout, market observers caution that the upcoming U.S. presidential election could introduce volatility to the cryptocurrency market.
In conclusion, while some believe that Bitcoin’s success is tied to the downfall of the U.S. dollar, experts like Hougan and Elliott argue that Bitcoin’s value proposition is strong enough to stand on its own. With increasing demand for alternative assets and concerns over traditional safe-haven investments, Bitcoin could continue its upward trajectory without the need for a currency crisis.