With Bitcoin BTC +6.49% ’s fourth halving out of the way, Bitwise CIO Matt Hougan has made five predictions ahead of the next one, estimated for April 2028.

In a memo to clients earlier this week, Hougan’s expectations focused on lower volatility, increased portfolio allocations and exchange-traded fund flows, central bank involvement and a price target of over $250,000 for bitcoin in the years ahead.

Though the volatility of the cryptocurrency has long been declining as the asset gained adoption, Hougan expects this to accelerate ahead of the next halving, primarily due to the U.S. spot bitcoin exchange-traded funds (of which Bitwise is one of the issuers).

Hougan said ETFs attract diverse investors like financial advisors and institutions to the bitcoin market. Such entities are more likely than retail investors to rebalance their portfolios and to make steady “drip” investments into the market, introducing countercyclical flows that could dampen volatility, he explained.

As a result, the Bitwise CIO expects the “typical” portfolio allocation to rise to where it’s considered “normal” to have 5% or more allocated to bitcoin. “Bitcoin hardly exists in these wrappers today, but I think this will change in the next few years across ETFs, 529 plans and 401k plans,” he said. “And I suspect the more aggressive versions of these portfolios will target 5% allocations or more.”

ETFs, central banks and a $250,000 price target

While the U.S. spot bitcoin ETFs have already generated around $12.5 billion in net inflows since trading began on Jan. 11 — the fastest-growing ETF category of all time — Hougan thinks they are “just getting started.”

Hougan made the case that the ETFs are still not broadly available at national wirehouses like Morgan Stanley and Merrill Lynch, while institutions are still only beginning their due diligence — both of which could stimulate long-term demand. He also argued that as net flows into gold ETFs rose for seven years straight after debuting in 2004, something similar could occur with the bitcoin ETFs.

The Bitwise CEO also made the bold claim that central banks will begin allocating to bitcoin this halving cycle. He noted that central banks hold around 20% of all the world’s gold, adding 2,000 tonnes over the past two years alone ($100 billion worth).

Hougan argued that as bitcoin is also non-debt money, cannot be seized in the same way sovereign bonds can and is more functional than gold for payments and settlement, it is increasingly attractive to governments in a multi-polar world, where countries like the U.S. are increasingly using financial tools as levers for foreign policy.

“There is also an element of game theory here. A major central bank adopting bitcoin as a reserve asset would be a game-changer for bitcoin and, I believe, would contribute to a dramatic increase in prices. Will one central bank try to front-run the others?,” Hougan added.

That leads us to Hougan’s price target ahead of the halving. Over the next four years, the Bitwise CIO expects more progress in terms of sophisticated custody options, low correlations to stocks, ease of access through ETFs and greater institutional adoption.

“With the ETFs launched and gathering assets — and major Wall Street firms lining up behind bitcoin — I suspect the asset will continue to move further into the mainstream. At $250,000, bitcoin would be a $5 trillion asset. Could it go higher? Of course. But $250,000 would represent solid progress between halvings, and I think we’ll see at least that,” Hougan said, echoing similar previous predictions.