Matt Hougan addressed the question of investors, “Does the US Dollar need to crash in order for Bitcoin’s valuation to be $200,000? Hougan’s research suggests that Bitcoin reaching such a high price is not dependent on the US dollar falling in value. Instead, it depends on Bitcoin maturing as an asset of store of value and on global economic factors that increase demand for such assets.
Bitcoin can reach $200,000 without US Dollar collapse
A series of posts Hougan shared a story on the social network X about a discussion he had with a financial adviser who asked him the question during dinner. “Does the US dollar need to collapse for Bitcoin to hit $200,000? The answer is ‘no.’ Here’s why,” Hougan wrote.
Hougan explained how investing in Bitcoin is two separate bets. First, “Bitcoin will succeed in establishing itself as a new ‘store of value’ asset.” Bitcoin is currently worth 7% less than the $18 trillion gold market. Hougan noted, “If it ‘matures’ and becomes 50% the size of goldEvery Bitcoin is worth more than $400,000.
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Second, “Governments will abuse fiat currencies and increase demand for ‘store of value’ assets.” Bitcoin will maintain its 7 percent market share if the size of the market for assets that store value triples as a result of such poor management. “each Bitcoin is worth over $200,000.”
He stressed that although these arguments are separate, they can combine. “If Bitcoin matures and the store of value market doubles, you quickly get to seven figures. For what it’s worth (FWIW), I think this is the most likely scenario eventually,” Hougan stated.
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Hougan addressed the original question directly. “So, no, the dollar doesn’t need to collapse for Bitcoin to hit $200,000. All you need is Bitcoin to continue on its current path of maturing as an institutional asset.” He added that both factors—BTC’s maturation and potential fiat currency abuse—are increasingly likely to occur simultaneously. “That’s why Bitcoin is surging toward all-time highs.”
Kevin Brent Cook added some nuance to Hougan’s explanation. “Concise, clear, and simple,” Cook made a comment. “I would only add that the reason a ‘collapse’ isn’t necessary is that under ‘abusing fiat’ comes the steady grind of deficit-driven dollar inflation (the US writes endless checks that never bounce), which naturally creates more currency chasing all assets.”
Hougan agreed with Cook’s assessment and responded with a concise “Agreed.”
BTC is currently trading for $72,445, a 23% increase in 20 days.
Featured image was created with DALL.E chart by TradingView.com
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Source: www.newsbtc.com
