Bitwise CIO indicates Bitcoin is set to exceed $100K due to ETF surge and whale accumulation.

Bitwise CIO Matt Hougan stated that Bitcoin (BTC) is set for a notable surge towards a “six-figure” valuation, driven by a combination of crucial factors that are enhancing investor interest.

In a social media update on Oct. 18, Hougan pointed out a rise in exchange-traded fund (ETF) inflows, spurred by a renewed influx of investments into Bitcoin-related financial products amid increased institutional focus on digital assets.

Increasing demand

Bitcoin, the sole cryptocurrency valued at over $1 trillion, has shown resilience and growth in response to rising demand from both institutional and retail investors. The leading cryptocurrency has approached its all-time high prices, trading just below $69,000 at the time of reporting.

Bloomberg senior ETF analyst Eric Balchunas recently noted that US spot Bitcoin ETFs have exceeded $20 billion in net inflows, with the overall Bitcoin ETF sector managing more than $65 billion in assets.

This rapid expansion, achieved in under a year, has significantly outstripped traditional asset-tracking ETFs like gold, which took six years to reach comparable figures.

According to Hougan, the increasing interest in Bitcoin ETFs indicates a change in market sentiment, particularly as institutional investors seek exposure to digital assets.

Political events and monetary policy

Hougan, along with other analysts in the sector, also pointed to the upcoming US presidential elections as a potential driver for Bitcoin’s price.

Former President Donald Trump is leading in on-chain betting polls, which has fueled speculation that the political climate could further enhance Bitcoin adoption due to his outspoken support for the sector.

Moreover, Hougan emphasized bipartisan agreements on rising fiscal deficits, referring to them as “infinite deficits.” These agreements would maintain a loose fiscal policy that could undermine fiat currencies, making Bitcoin’s deflationary characteristics more appealing to investors.

Simultaneously, economic stimulus initiatives in China, along with global interest rate reductions by both the Federal Reserve and the European Central Bank, are anticipated to further boost demand for Bitcoin, as low-interest-rate conditions tend to promote risk-taking in financial markets.

Supply constraints

Hougan also remarked that the post-halving supply shock is “starting to bite” as whales and ETFs persist in accumulating Bitcoin. Data indicates that large Bitcoin holders have been accumulating at unprecedented rates, with whale wallets now controlling 9.3% of the total supply.

Additionally, CryptoQuant data showed that new Bitcoin whales have invested nearly $108 billion as of Oct. 6, reflecting a 13x increase this year. These new whales now represent 48.8% of Bitcoin’s total realized cap. This marks the highest amount ever expended by these investors, nearly equaling the $113 billion held by “old whales.”

The increase in new whale participation is viewed as a “generational shift,” and their realized cap is expected to soon exceed that of older whales. Realized cap, which gauges the value of each Bitcoin based on its last transaction price, is utilized to evaluate the value stored in Bitcoin.

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