In a recent investor note, Bitwise CIO Matt Hougan provided a comprehensive look at Bitcoin’s trajectory towards the 2028 halving, predicting a 50% decline in volatility and increased involvement from institutional investors.
Bitcoin (BTC) hit a new all-time high in the weeks leading up to the 2024 halving, with an unprecedented surge. Hougan believes this trend will continue after the halving and cause Bitcoin’s price to escalate dramatically, as it has in the past since its $13 valuation at the time of the first halving in 2012.
Hougan confirmed previous price predictions and said Bitcoin is still on track to reach $250,000 in the coming years.
He added that this consistent value growth points to the increasing adoption of Bitcoin within the financial sector, especially following the launch of spot Bitcoin ETFs, which have posted record performance in the first three months of trading.
Institutional money
Hougan highlighted the transformative impact of spot Bitcoin ETFs on the market, as these instruments have been crucial in attracting a new wave of institutional investors, such as financial advisors and large financial entities, who are bringing a more disciplined trading approach to the volatile market.
According to the Bitwise CIO, this shift is expected to contribute significantly to the predicted 50% reduction in Bitcoin’s volatility at the next halving.
Hougan said the entry of institutional investors through Bitcoin ETFs introduces a stabilizing force in the market. These investors tend to employ strategic rebalancing and steady, incremental investments, which differ significantly from the speculative actions of retail investors that have characterized Bitcoin trading in the past.
He also predicted that Bitcoin will become a standard component in diversified investment portfolios by 2028, with allocations potentially reaching 5% or even more. The projection is supported by growing confidence and recognition of Bitcoin’s maturing market and reduced price volatility.
$200 billion in assets under management
To further strengthen Bitcoin’s appeal, Hougan predicts that institutional capital inflows into Bitcoin ETFs could exceed $200 billion, boosted by broader market access and deeper financial inclusion.
He noted that this would promote market stability and solidify Bitcoin’s position as a mainstream financial asset. The optimistic outlook for Bitcoin is tempered by reminders of the inherent risks associated with crypto investments, such as market volatility and regulatory uncertainties.
Nevertheless, Hougan portrays a future where Bitcoin could achieve widespread institutional adoption and adoption as a staple of investment portfolios, fundamentally changing market trends and perception by the 2028 halving.