An expert from Bitwise Asset Management believes that the adoption of Bitcoin as a reserve asset by governments could significantly impact its value.
Government Adoption of Bitcoin
Matt Hougan, CIO at Bitwise Asset Management, highlighted in an interview on the Mr. M Podcast that adding Bitcoin to government reserves could lead to its dramatic price increase. Currently, this potential factor is not reflected in the market.
Supply and Demand Dynamics
According to Hougan, the projected Bitcoin production in 2025 is 160,000-170,000 BTC. However, last year companies bought 270,000 BTC, and ETFs acquired between 400,000 to 500,000 BTC, indicating a potential supply shortfall relative to demand. This could result in significant Bitcoin price increases.
Potential Market Impact
Currently, Bitcoin is trading at approximately $94,744. Given all the mentioned factors, future Bitcoin price movements are expected to be closely tied to government cryptocurrency policies.
Thus, the adoption of Bitcoin as a reserve asset by governments, along with current supply-demand imbalances, could considerably affect its price in the coming years.
