In a recent note to investors, Bitwise CIO Matt Hougan provided a comprehensive outlook on Bitcoin's trajectory toward halving by 2028, predicting a 50% decrease in volatility and increased engagement from institutional investors .
Bitcoin (BTC) hit a new all-time high just weeks before the 2024 halving, in an unprecedented surge. Hougan believes that this trend will continue after the halving and will cause the price of Bitcoin to rise dramatically, as has been the case in the past since its valuation of $13 at the time of its first halving in 2012.
Hougan reaffirmed his previous price predictions and said that Bitcoin is still on track to reach $250,000 in the coming years.
He added that this consistent growth in value indicates the growing acceptance of Bitcoin in the financial sector, especially after the launch of spot Bitcoin ETFs, which saw record performance in the first three months of trading.
Institutional money
Hougan highlighted the transformative impact of Bitcoin spot ETFs on the market, as these instruments have played a crucial role in attracting a new wave of institutional investors, such as financial advisors and large financial entities, who bring a commercial approach more disciplined in the volatile market.
According to the Bitwise CIO, this change is expected to significantly contribute to the planned 50% reduction in Bitcoin volatility by the next halving.
Hougan said the entry of institutional investors through Bitcoin ETFs introduces a stabilizing force to the market. These investors tend to resort to strategic rebalancing and regular, incremental investments, which differs significantly from the speculative actions of retail investors that have characterized Bitcoin trading in the past.
He also predicted that by 2028, Bitcoin will become a standard part of diversified investment portfolios, with allocations reaching or exceeding 5%. This projection is supported by growing recognition and confidence in the mature Bitcoin market and reduced price fluctuations.
$200 billion in assets under management
Further boosting Bitcoin's appeal, Hougan predicts that institutional capital inflows into Bitcoin ETFs could exceed $200 billion, driven by broader market access and deeper financial integration.
He noted that this would promote market stability and solidify Bitcoin's position as a traditional financial asset. The optimistic outlook for Bitcoin is tempered by reminders of the inherent risks associated with crypto investments, such as market volatility and regulatory uncertainties.
Nonetheless, Hougan describes a future in which Bitcoin could be widely adopted and accepted by institutions as a core part of investment portfolios, fundamentally changing market trends and perception by 2028.