ccording to Hougan, the rise of Bitcoin in terms of price, is not correlated necessarily with a falling dollars. Furtermore, he states that one key factor that will propel bitcoin to new highs is the fact that Bitcoin is digital gold, and so it is its scarcity and cap supply that is the driving force. Currently, Bitcoin market cap is only making up approximately 7% of $18 trillion gold market, so if it only getts to 25% of gold market there is room for bitcoin to go much past the $200,000 dollars mark.
The role of Fiat money on inflationary pressures
Moreover, Hougan argues that The second force is the rising risk to fiat currencies and inflation most especially the US dollar as fiat money have no max supply and government have full control and can print as much as they want. For Hougan, with the US federal debt now approaching $36 trillion, he expects the fiscal pressures consequently exert pressure toward more investors to seek refuge in the traditional safe haven assets like Bitcoin.
Dual Drivers for Upside
According to Hougan, bulls could see Bitcoin’s price skyrocket even if only one of these two forces comes to fruition. Nevertheless, if Bitcoin’s market share of store of value increases to $500 billion, the price will be $214k without any inflation factor. On the other hand, an increased demand for alternative assets because of concerns over fiat currencies should also lift the price of Bitcoin. Placing Bitcoin as a major alternative to Gold for this new digital world.
Cautious Approach
Despite being a BTC fan and advocate, Hougan equally warns the investors on the BTC risks such as high volatility and price swings as well as regulatory issues among others.
