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Matt Hougan on Why Bitcoin Has Value: ‘How Is It Worth $2 Trillion?’
- Bitcoin’s worth comes from the service it provides: storing digital wealth without intermediaries, not physical tangibility.
- Demand from global institutions, pensions and individual investors has driven its 28,000% price increase over ten years.
- Short-term market declines do not affect its long-term relevance; adoption and rising debt are expected to boost future demand.
Growing interest in Bitcoin’s long-term purpose continues to shape discussions among financial professionals, especially as the asset undergoes another period of volatility. Despite a drop of roughly 27.5% from its early October peak and a brief fall below US$90,000 (AU$138,751), Bitwise CIO Matt Hougan argues that these fluctuations do little to alter the foundations of Bitcoin’s value.
The reasoning shared with advisers often centres on a recurring question: how an asset without profits, dividends or physical form can justify a valuation near US$2 trillion (AU$3.08 trillion).
A clearer answer emerges when Bitcoin is understood not as a conventional object but as a service. This service is the ability to hold wealth digitally without relying on any government, bank or intermediary, a framing that helps strip away scepticism tied to Bitcoin’s intangibility.
The comparison frequently used is Microsoft, whose software offerings derive their worth entirely from user demand rather than physical characteristics. As stated, “The value of Microsoft’s stock is tied to how many people want its service,” and the same demand-driven logic is said to apply to Bitcoin.
Related: Standard Chartered Analyst Says Bitcoin Sell-Off Has Bottomed, Eyes Year-End Rally
How Utility Drives Bitcoin’s Value
Yet Bitcoin differs in one important respect: while Microsoft’s products can be accessed through subscriptions, Bitcoin’s service cannot be rented, meaning access requires purchasing the asset itself. This structural feature helps explain its approximate 28,000% appreciation over the past decade, during which interest has expanded from individual users to state pensions, major endowments, sovereign wealth funds and well-known investors.
Recent market softness, therefore, is described as short-term noise rather than a shift in fundamentals. With digitalisation accelerating and government debts rising globally, demand for a non-sovereign means of storing value is expected to broaden, reinforcing Bitcoin’s relevance over the long run.
Related: Arthur Hayes Warns Bitcoin Could Dip to $80K Before Liquidity Fuels a Run to $250K
Author
Rachel Lourdesamy
Rachel is a freelance writer based in Sydney with experience within financial services, marketing, and corporate communications in the APAC region. An avid reader and a graduate of the University of Sydney, she covers topics including business, finance and human interest.
