The prospect of Bitcoin reaching a price of $1 million is often dismissed as unrealistic, as it seems to require Bitcoin to replace nearly half of gold's market capitalization. However, Bitwise CIO Matt Hougan has proposed a new analytical framework that suggests this goal is far from impossible.
The key is that Bitcoin does not need to completely replace gold, but only needs to gain a foothold in the expanding global store of value asset market. According to historical data, the total market value of gold has grown from approximately $2.5 trillion in 2004 to nearly $38 trillion today, with an average annual growth rate of approximately 13%. If this trend continues, the total size of global store of value assets could exceed $121 trillion in ten years.
In this scenario, Bitcoin only needs to capture about 17% of the market share to support a price of $1 million per coin. This percentage, while high, is far lower than the previously assumed “swallowing 50% of gold's market value,” an unattainable threshold. As a result, Bitcoin's value logic shifts from a “zero-sum game” to “incremental coexistence”—it is no longer competing with gold for existing assets, but rather, as an emerging digital store of value asset, it is gaining trust and allocation in a diversified hedging landscape.
Bitwise further points out that this prediction is not a purely theoretical deduction, but is based on Bitcoin's increasing recognition by the traditional financial system. From the entry of institutional investors and the approval of Bitcoin ETFs to the inclusion of Bitcoin in the portfolios of mainstream banks and asset management companies, the process is slow, but the trend is clear. It is this continuous institutional acceptance that provides realistic support for Bitcoin's long-term value.