Bitcoin’s Potential for Parabolic Price Rise Mirrors Gold’s 2025 Trajectory, Says Bitwise CIO

Bitcoin ETF Demand Could Trigger Supply Squeeze, Leading to Dramatic Price Acceleration

In a compelling analysis drawing parallels between gold’s historic performance and Bitcoin’s current market dynamics, Matt Hougan, Chief Investment Officer at cryptocurrency asset management firm Bitwise, has presented a case for potentially explosive growth in Bitcoin prices. According to Hougan, if the current demand for Bitcoin exchange-traded funds (ETFs) maintains its momentum, the cryptocurrency could experience a parabolic price increase similar to what occurred in the gold market in 2025.

“The fundamental price drivers for both gold and Bitcoin boil down to basic economics—supply and demand,” Hougan explained during a recent market analysis. “What we’re witnessing with Bitcoin today bears remarkable similarities to gold’s market behavior leading up to its dramatic surge in 2025.” This observation comes at a critical time in cryptocurrency’s evolution, as institutional investment vehicles like ETFs continue to reshape the market landscape and potentially alter long-term price trajectories.

The Gold Precedent: Understanding the Delayed Price Impact of Sustained Demand

The parallels Hougan draws between gold and Bitcoin offer a compelling historical framework. While mainstream financial analysis often attributes gold’s approximately 65% price surge in 2025 primarily to aggressive purchasing by central banks, a deeper examination reveals nuanced market dynamics that Bitcoin appears to be replicating. Following the United States’ controversial decision to freeze and seize Russian Treasury bonds in 2022, central banks worldwide dramatically increased their gold acquisitions as a hedge against geopolitical financial risk. Annual purchases doubled from roughly 500 tons to 1,000 tons and have remained elevated since—signaling a fundamental shift in institutional attitudes toward traditional safe-haven assets.

What’s particularly noteworthy about gold’s trajectory—and potentially instructive for Bitcoin investors—is the delayed price response to this demand surge. Despite the substantial increase in central bank purchasing, gold prices rose by a modest 2% in 2022, followed by 13% in 2023 and 27% in 2024. The truly dramatic “parabolic” price movement didn’t materialize until 2025. Hougan attributes this pattern to market absorption mechanisms: “In the initial years of heightened demand, existing gold holders were willing to liquidate their positions at prevailing prices, effectively satisfying the new demand without dramatic price increases. However, as these willing sellers gradually exhausted their holdings while demand remained strong, the available supply contracted significantly—creating the perfect conditions for rapid price acceleration.”

Bitcoin’s Current Supply-Demand Imbalance: Setting the Stage for Future Growth

The Bitcoin market appears to be following a remarkably similar trajectory, according to Hougan’s analysis. Since the landmark approval and launch of spot Bitcoin ETFs in January 2024—a development widely regarded as legitimizing Bitcoin in traditional financial circles—ETF purchases have consistently exceeded the rate of new Bitcoin production. “ETF inflows have surpassed 100% of newly mined Bitcoin supply,” Hougan noted, highlighting a fundamental imbalance that would typically drive prices dramatically higher in most markets.

Yet, similar to gold’s initial response to central bank buying, Bitcoin hasn’t yet exhibited the explosive price growth that such demand imbalances might suggest. The explanation, Hougan contends, lies in the behavior of existing Bitcoin holders who continue to liquidate portions of their holdings, effectively counterbalancing the ETF-driven demand. “What we’re seeing is a transfer of Bitcoin ownership from early adopters and long-term holders to institutional investors and retail participants entering through ETF products,” explained Hougan. “This rotation of ownership can mask the underlying supply-demand imbalance temporarily, but history suggests it’s not sustainable indefinitely.”

The Critical Inflection Point: When Sellers Exhaust Their Supply

The pivotal question facing the Bitcoin market concerns the sustainability of current selling pressure from existing holders. If ETF demand persists at current levels—or potentially accelerates as more institutional investors embrace cryptocurrency exposure—Hougan believes a critical inflection point approaches when willing sellers will effectively exhaust their “ammunition.” This supply exhaustion scenario mirrors what ultimately triggered gold’s parabolic move in 2025.

“Market dynamics fundamentally operate on supply and demand, regardless of the asset class,” Hougan emphasized. “When persistent demand meets increasingly constrained supply, price discovery becomes volatile and typically resolves sharply upward.” This perspective challenges the notion that Bitcoin’s price behavior should be analyzed primarily through technical indicators or sentiment metrics, instead emphasizing the importance of fundamental supply dynamics. The comparison to gold provides a tangible historical precedent for how such supply-demand imbalances can play out over multi-year timeframes before culminating in dramatic price action.

Investment Implications and Market Preparation

As institutional adoption of Bitcoin continues through regulated investment vehicles like ETFs, the potential for a supply-driven price acceleration deserves serious consideration from market participants. Hougan’s analysis suggests that current Bitcoin prices may not fully reflect the underlying structural changes occurring in ownership distribution and future supply availability. The gold precedent indicates that markets can absorb significant demand imbalances for extended periods before reaching tipping points that trigger parabolic price movements.

For investors and market observers, this framework provides a valuable perspective beyond short-term price fluctuations. The gradual transfer of Bitcoin holdings from early adopters to institutional and retail investors through ETFs represents a fundamental market evolution that could eventually create the conditions for significant price discovery when willing sellers become scarce. While Hougan’s analysis offers compelling parallels to historical precedents, prudent investors should recognize that all markets contain unique variables and that past patterns do not guarantee future results. As with any investment thesis involving emerging asset classes, comprehensive risk assessment remains essential despite encouraging supply-demand dynamics.

This analysis is provided for informational purposes only and should not be considered investment advice. Markets involve risk, and individual investment decisions should be made in consultation with qualified financial advisors considering personal circumstances and risk tolerance.