Bitcoin's Potential Rise to Global Currency Status

Bitcoin's market capitalization has been steadily growing, but it still lags behind that of gold, which is estimated at over $33.7 trillion. However, if Bitcoin were to evolve into a functional currency, its total addressable market could exceed that of gold, according to Bitwise CIO Matt Hougan.

Hougan points out that recent geopolitical developments have highlighted the potential for Bitcoin to become an apolitical alternative in situations where traditional financial systems are constrained. For example, authorities in Tehran have floated a proposal to levy transit tolls on ships passing through the Strait of Hormuz, with payments potentially accepted in crypto.

This development suggests that Bitcoin can operate outside traditional banking systems and that its total addressable market is likely much larger than initially thought. Hougan predicts that if Bitcoin were to capture 17% of the store-of-value segment over the next decade, its price could reach $1 million per coin. However, he notes that a dual role as both currency and reserve asset would likely push valuations even higher.