Bitwise Chief Investment Officer Explains What’s Needed for a Massive Rally in Bitcoin

Matt Hougan, Chief Investment Officer at crypto asset management company Bitwise, said that if ETF demand continues in the long term, Bitcoin prices will experience a parabolic rise.

Hougan pointed out that this process bears a strong resemblance to the price behavior seen in the gold market in 2025.

According to Hougan, prices for both gold and Bitcoin are fundamentally determined by the balance of supply and demand. The mainstream trend attributes gold’s approximately 65% rise in 2025 to intense central bank purchases. However, a historical examination reveals that Bitcoin is undergoing a similar dynamic today. Following the US freezing and seizing Russian Treasury bonds in 2022, central bank gold purchases increased sharply; annual purchases rose from approximately 500 tons to 1,000 tons and have remained high ever since.

Although this strong increase in demand shifted the supply-demand balance, its impact on prices was delayed. Gold rose only 2% in 2022, 13% in 2023, and 27% in 2024. The real “parabolic” momentum came in 2025. Hougan explains this by saying that in the early years, the increased demand was met by existing holders willing to sell, but over time, these sellers’ stocks ran out. As demand continued while the available supply decreased, prices rose rapidly.

According to Hougan, the same mechanism applies to Bitcoin and spot ETFs. Since the launch of Bitcoin spot ETFs in January 2024, ETF purchases have exceeded 100% of the newly produced BTC supply. Despite this, a parabolic price jump hasn’t yet been seen because existing Bitcoin holders continue to sell. However, if ETF demand persists, Hougan believes these sellers will run out of “ammunition,” and the resulting supply squeeze will rapidly drive prices upwards.