Bitwise CIO Predicts 50% Drop in Bitcoin Volatility Amid Rising Institutional Interest

Matt Hougan, Chief Investment Officer at Bitwise, recently outlined a future where Bitcoin's volatility could drop by 50% due to increased institutional involvement. In a detailed investor update, Hougan reiterated his previous price target of $250,000 for Bitcoin in the coming years. Leading up to the 2024 halving, Bitcoin achieved record highs.

Hougan predicts these surges will continue post-halving, a trend that has been noted since Bitcoin's valuation was just $13 during its first halving in 2012. Hougan emphasized the significant influence of spot Bitcoin ETFs, which have attracted large-scale institutional investors. These entities bring disciplined investment strategies that contrast with the speculative nature of retail trading, promising to stabilize the traditionally volatile cryptocurrency.

By 2028, Hougan expects Bitcoin to become a regular asset in diversified portfolios, potentially accounting for 5% or more of allocations. This integration into mainstream portfolios is bolstered by growing familiarity with Bitcoin's increasingly stable market. The CIO also predicts that capital inflows into Bitcoin ETFs could reach over $200 billion, enhancing Bitcoin's stability and solidifying its status as a mainstream financial asset.

This optimistic outlook remains cautious of the risks linked with cryptocurrency investments, including market volatility and regulatory challenges. Hougan paints a picture of a future where Bitcoin not only sees broader institutional adoption but also becomes a foundational component of investment strategies, significantly altering its market dynamics by the 2028 halving.