Bitwise Investment Director Matt Hougan asserts that despite recent declines in Bitcoin’s price, institutional demand remains robust. He believes the true value of the asset lies in the digital service it offers. According to Hougan, Bitcoin 
$78,815 provides a unique function by enabling the storage of digital wealth without reliance on governments or banks. Although Bitcoin fell by 27.5% after rising to $126,000 on October 6 and subsequently dropping below $90,000, Hougan views this as a short-term correction.
Viewing Bitcoin as a “Service”
According to The Block, Hougan emphasizes that to understand Bitcoin’s value, investors should consider it as a service rather than a mere asset. In his opinion, Bitcoin offers its users the ability to protect their wealth digitally without third-party dependencies. Using the example of Microsoft, he explains that “The value of Microsoft’s stock increases with the demand for its services; similarly, Bitcoin appreciates as the necessity for its service grows.”
Hougan underscores that Bitcoin cannot be rented or subscribed to, highlighting that the only way to benefit from its service is by purchasing the asset itself.
He believes the approximately 28,000% increase in Bitcoin’s value over the past decade can be attributed to this growing demand for its service. Investors should focus on the financial freedom service Bitcoin provides rather than its absence as a physical asset.
Institutional Demand Strengthens Bitcoin’s Foundation
Hougan suggests that institutional adoption is the main driving force behind Bitcoin’s long-term appreciation. Investments by institutions such as the Harvard University Endowment, Abu Dhabi Investment Authority, Ray Dalio, Stan Druckenmiller, and various state pension funds reveal the depth of this demand. In a world increasingly moving towards digitization, and with rising government debts, Hougan predicts more investors will turn to the services Bitcoin offers.
Hougan’s remarks were included in a note sent to Bitwise clients and are particularly aimed at investors questioning “why Bitcoin is valuable”. The Chief Investment Officer (CIO) stresses his belief that despite current price fluctuations, Bitcoin will maintain its value in the long run.
