Bitcoin's role in the global financial system is evolving, with its potential market size exceeding that of gold, according to Matt Hougan, Chief Investment Officer at Bitwise. Hougan believes that if Bitcoin expands beyond its current use as a store of value and becomes a widely accepted currency, its total addressable market could increase substantially.
The idea of Bitcoin as a functional currency is gaining traction, particularly in regions with unstable financial markets. For example, in Iran, authorities have proposed using cryptocurrency for transit tolls on ships passing through the Strait of Hormuz. This development highlights Bitcoin's ability to operate outside traditional banking systems and could be an early sign of its increasing adoption.
Hougan estimates that if Bitcoin captures 17% of the store-of-value market over the next decade, it could reach a price of $1 million per coin. However, he notes that this projection is based on partial penetration into the store-of-value segment and does not take into account the potential benefits of Bitcoin's dual role as both currency and reserve asset.