Bitcoin’s (BTC) price could surge to $200,000 without the need for a collapse of the US dollar, according to Bitwise CIO Matt Hougan.

In his latest investor memo, Hougain suggested that Bitcoin’s value rests on two independent forces: its role as a digital store of value and inflationary pressures on fiat currencies.

Key forces driving Bitcoin

Hougan said that many analysts overlook Bitcoin’s broader potential, often assuming its growth depends on a weakening dollar. According to the Bitwise CIO:

“You get a much better view of Bitcoin. If you separate these arguments.”

Hougan argued that the first driver is Bitcoin’s position as a digital equivalent to gold. Despite representing only 7% of gold’s estimated $18 trillion market, BTC’s market cap has the potential to grow significantly as it gains acceptance among investors.

He noted:

“Bitcoin’s price could rise even if it captured just 25% of gold’s market pushing it well past $200,000.”

The second force stems from the possible debasement of fiat currencies, particularly the dollar, which could drive more investors toward assets like Bitcoin as a hedge. With US federal debt at $36 trillion, Hougan sees growing fiscal pressures prompting a significant expansion in the store-of-value market, benefiting Bitcoin.

Beyond store of value

Hougan emphasized that Bitcoin could increase in value even if only one of these forces materializes. Should Bitcoin’s share of the store-of-value market grow, it could reach $214,000, independent of inflationary pressures.

Conversely, an expanded market for alternative assets, driven by fiat concerns, could also push Bitcoin’s price higher. However, the greatest upside would occur if both forces converge.

Additionally, Hougan suggested that Bitcoin’s utility may eventually extend beyond its role as a store of value, potentially becoming an international settlement layer. He believes broader applications could further enhance Bitcoin’s value, positioning it as a key player in the global financial ecosystem.

Hougan also cautioned investors about the risks of trading in Bitcoin, emphasizing the volatility and regulatory concerns that require careful consideration.

Ultimately, Hougan sees Bitcoin’s path to $200,000 as achievable if it continues to grow within these dual drivers — without requiring a collapse of the US dollar.

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