Bitwise Chief Funding Officer Matt Hougan is now making use of his long-standing Bitcoin framework to Solana — and he’s calling the setup “explosive.”
In an October 29 memo, Hougan says the most effective trades in crypto are those the place you get “two methods to win” with one place. For Bitcoin, he defines these two bets as: “1) The worldwide ‘retailer of worth’ market will develop. 2) Bitcoin will take an rising share of that market.” He says solely a kind of outcomes needs to be true for Bitcoin to work.
Hougan sizes that “retailer of worth” market at roughly $27.5 trillion in the present day, together with about $25 trillion in gold and $2.5 trillion in Bitcoin. He argues traders focus an excessive amount of on Bitcoin changing gold and never sufficient on the general market itself increasing.
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He notes that this market has already grown by roughly 10x within the final 20 years, from underneath $3 trillion in 2005 to $27.5 trillion in the present day. In his view, if that repeats, Bitcoin can 10x without having to totally displace gold. If, on high of that, Bitcoin additionally closes the hole with gold and finally ends up with half of the entire store-of-value market, “each bitcoin could be price $6.5 million.” He provides, “I’m not saying that can occur,” however he makes use of the mathematics to point out how highly effective the dual-bet construction could be.
Solana’s Twin Progress May Mirror Bitcoin
Hougan now argues Solana suits the identical mannequin. “Once I put money into Solana, I’m additionally making two bets without delay,” he writes. These two bets are: “1) The stablecoin and tokenization infrastructure market will develop. 2) Solana will win an rising share of that market.”
He defines that market because the set of blockchains that energy stablecoin funds and asset tokenization in the present day. He names Ethereum as “the market chief,” and lists Tron, Solana, and Binance Sensible Chain as main challengers in stablecoins. Collectively, he says, these networks signify $768 billion in market worth. Solana’s share of that’s $107 billion, or roughly 14%.
For Hougan, that’s the opening. He says he has “plenty of confidence that the stablecoin and tokenization infrastructure market will develop,” and argues most individuals “considerably underestimate how a lot these applied sciences will remake markets.”
His long-run declare is blunt: “Over time, I think almost all funds will likely be in stablecoins and almost all belongings will likely be tokenized.” If that performs out, “the blockchains that facilitate this progress will likely be extraordinarily worthwhile.” He calls it “simple to think about this market rising by 10x or extra.”
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The second half, in his view, is Solana’s skill to seize extra of that enlargement. He calls Solana “quick” and “user-friendly,” backed by a neighborhood with a “ship-fast angle.” He additionally notes that Solana remains to be “taking part in catch-up” in successful institutional mandates, however says that’s beginning to change. For example, he cites Western Union’s introduced stablecoin effort this week, and factors out that Western Union selected Solana because the underlying blockchain.
Hougan’s argument is that if the general marketplace for stablecoin settlement and tokenized belongings 10xes, and Solana grows its share of that market from 14%, the end result just isn’t linear — it compounds. “If I’m proper,” he writes, “the mixture of a rising market and a rising share of that market will likely be explosive for Solana. Simply as with bitcoin.”
He closes with a notice on positioning. Crypto, he says, rewards humility as a result of “even probably the most seasoned specialists don’t know precisely how issues will play out.” However he says you’ll be able to nonetheless tilt odds in your favor by proudly owning belongings that embed two high-conviction bets without delay. In his view, Bitcoin already suits that profile. Solana now does too.
At press time, SOL traded at $186.
Featured picture created with DALL.E, chart from TradingView.com
