Bitcoin’s trajectory towards a potential $200,000 milestone by the end of 2025 is gaining traction, driven by what Bitwise’s Chief Investment Officer, Matt Hougan, describes as an impending “supply shock.” Speaking at the Consensus 2025 conference in Toronto, Hougan highlighted a structural imbalance between demand and supply that could propel the cryptocurrency to new highs.
Institutional Appetite on the Rise
The current landscape of Bitcoin accumulation paints a vivid picture of rising institutional interest. Hougan notes that publicly traded companies have already purchased more Bitcoin than miners are expected to produce this year—165,000 BTC to be precise. Exchange-traded funds (ETFs) are also making waves, with $6 billion in inflows energizing the market. And it doesn’t stop there; governments, according to Hougan, are eyeing Bitcoin with increasing interest.
“We’re seeing a significant gap between what is being mined and what’s being hoarded,” Hougan elaborated, suggesting that the existing supply won’t meet the escalating demand. He confidently predicts that Bitcoin will break free from its current $100,000 resistance, aiming for $200,000 as the next logical target. This follows a pattern of institutional adoption, which we detailed in Strategy Raising Another $21B to Buy Bitcoin, Posts Large Q1 Loss on BTC Price Decline.
The Strategy Effect
One cannot overlook the outsized influence of corporate players like Strategy on Bitcoin’s ecosystem. The company has become a formidable force, amassing a staggering 568,840 BTC, as tracked by SaylorTracker. Adam Livingston, a noted Bitcoin analyst, describes Strategy’s approach as “synthetically halving Bitcoin” by accumulating more than the newly mined supply. In the last six months alone, Strategy has added 379,800 BTC to its holdings.
“BTC’s global cost of capital will no longer be set by ‘the market.’ It will be set by the gravitational policies of the first Bitcoin superpower: Strategy,” Livingston observed. This concentrated accumulation has led market analyst Ki Young Ju to assert that Bitcoin’s supply is now deflationary, with an annual deflation rate of -2.33%. For more on Strategy’s aggressive expansion, see Strategy’s $84B Bitcoin Expansion Plan Backed by Wall Street Analysts.
A Vestige of the Past?
Reflecting on Bitcoin’s historical volatility, Hougan suggests that the notorious four-year halving cycles, characterized by severe price drawdowns, may soon be relics of the past. The influx of institutional capital and the strategic maneuvers by major players like Strategy are reshaping the market dynamics, potentially stabilizing Bitcoin’s erratic price swings.
Yet, the road to $200,000 isn’t paved without hurdles. While some analysts are bullish about Bitcoin reaching $1 million in the next decade, others, like Arthur Hayes, are more cautious. Hayes points to a deteriorating macroeconomic backdrop and potential central bank interventions as factors that could influence Bitcoin’s price trajectory in unforeseen ways.
Looking Ahead
As Bitcoin continues to evolve, questions loom large. Can the market sustain its current momentum? Will institutional demand continue to outstrip supply? And how will macroeconomic factors interplay with Bitcoin’s burgeoning role in global finance?
These variables inject a degree of unpredictability into Bitcoin’s future, but one thing is clear: the cryptocurrency is at a pivotal juncture. Those watching closely might find themselves at the forefront of a financial revolution—or merely witnessing the latest chapter in Bitcoin’s volatile history. Only time will tell.
Source
This article is based on: Bitcoin supply crunch boosts confidence in $200K target for 2025 — Bitwise CIO
Further Reading
Deepen your understanding with these related articles:
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- Bitcoin Surges Past $94,000 as Institutional Interest and Market Optimism Grow
- Metaplanet to open US arm, plans to raise $250M for Bitcoin strategy
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
