Bitcoin’s long arc points to a radically higher price

Hougan’s outlook lands after a punishing year for digital assets in 2025, when tighter financial conditions, regulatory uncertainty and a cooling risk appetite weighed on prices. He expects a period of sideways trading to dominate the near term, with price action shaped more by macro stability and adoption milestones than speculative fervour. The longer horizon, however, is framed by scarcity and adoption curves that he says remain intact.

Bitcoin’s fixed supply of 21 million coins is central to the thesis. Roughly 19.6 million have already been mined, with issuance slowing every four years through halving events that cut block rewards. That supply trajectory contrasts with fiat currencies, whose issuance responds to economic conditions and policy choices. Hougan argues that as demand grows against a predictable supply, price appreciation becomes a function of adoption rather than novelty.

Institutional participation has deepened in ways that were not present in earlier cycles. Exchange-traded products linked to Bitcoin have broadened access for pension funds, insurers and registered investment advisers, enabling exposure within regulated frameworks. Asset managers report that allocations are often small but persistent, reflecting portfolio diversification rather than directional bets. Custody, market surveillance and compliance standards have also matured, lowering barriers for conservative capital.

Corporate balance sheets are another pillar. A cohort of publicly listed companies now hold Bitcoin as a treasury asset, citing hedging characteristics and long-term optionality. While holdings remain concentrated among a few names, the practice has gained board-level scrutiny across sectors, particularly among firms with global revenue bases and exposure to currency risk. Hougan notes that adoption here tends to be incremental and sticky, with reversals rare once policies are established.

Policy attention has broadened as well. Central banks are exploring digital money architectures primarily through central bank digital currencies, yet Bitcoin’s role as a non-sovereign asset has entered policy discussions around reserves, settlement and sanctions resilience. Hougan stops short of predicting widespread central bank purchases, but points to early analytical work and limited pilot considerations as signals of curiosity rather than endorsement. Even modest official-sector interest, he argues, would have an outsized impact on a market defined by scarcity.

Market structure has also evolved. Liquidity has improved across major venues, derivatives markets are deeper, and price discovery increasingly reflects global participation rather than single-region flows. Volatility remains high compared with traditional assets, but drawdowns have shortened in duration as the investor base diversifies. That shift underpins Hougan’s expectation of consolidation rather than collapse following 2025’s setbacks.

Critics challenge the long-range forecast on valuation grounds, noting that a $6.5 million price implies a market capitalisation that rivals or exceeds major global asset classes. Hougan counters by framing Bitcoin as a candidate for a share of global store-of-value demand that spans gold, offshore deposits and other monetary hedges. If Bitcoin were to capture a meaningful slice of that pool over two decades, the implied valuation would be large but not implausible, he says.