The Price of Bitcoin May Face These Two Key Risks – Bitwise CEO

The price of Bitcoin’s rapid climb, from $40,000 to $75,000 on spot‑ETF approval, then above $100,000 under a pro‑crypto administration, has captured headlines.

Yet Bitwise CEO Hunter Horsley warns that the price of Bitcoin may run into two structural obstacles before its next leg up.

He points to rising competition from high‑return alternatives and a waning “digital gold” narrative among institutions.

In Q2, Bitcoin‑linked exchange‑traded funds flipped from $3.3 billion in outflows to nearly $10 billion of inflows, per Bold Report data.

By contrast, gold ETFs saw demand fall 40%, from $30 billion to roughly $15 billion over the same period.

That divergence underpins Bitcoin’s 34% outperformance versus gold since April, though gold has clawed back a 10% edge on BTC since mid‑May, according to the BTC/gold ratio on TradingView.

ETF flows matter because they channel institutional dollars into liquid, regulated vehicles. “Institutional appetite remains robust,” Horsley said. But he cautioned that inflows can shift if other assets offer more attractive risk‑adjusted returns.

Bitwise CEO Reveals Key Hurdles to Price of Bitcoin

Horsley’s first concern is that investors hunting for 10× returns may look beyond Bitcoin. He noted a growing universe of decentralized finance projects, layer‑2 tokens, and new blockchains promising exponential gains. That competition could dilute capital into smaller, higher‑volatility tokens.

“Most investors and allocators are very busy. They’re constantly presented with opportunities, including things that could 10x,” he wrote, adding that “why do they *need* to turn their attention to Bitcoin, which for many is still a complicated topic.”

DeFi lending tokens, NFT platform tokens, and Ethereum layer‑2 coins have delivered returns north of 200% in recent quarters—far eclipsing Bitcoin’s 58% year‑on‑year gain, per CoinGecko.

The second hurdle is a possible erosion of Bitcoin’s “apolitical store‑of‑value” story. Early backers likened BTC to digital gold, an inflation hedge unmoored from any government. But Horsley argues that narrative is fading among major asset allocators.

He predicts that Bitcoin’s true rivals will be government bonds and T‑bills—what he calls “ultimate political stores of value.” U.S. 10‑year Treasury yields, which peaked near 4.5% in Q2, now offer safe, yield‑bearing alternatives that institutional treasury desks understand.

“I don’t think Bitcoin’s competition is going to end up being gold,“ he stated, adding that “I think Bitcoin’s competition is going to end up being U.S. Treasuries and other governments’ Bonds (eg, UK gilts): the ultimate *political* SOVs..” Higher nominal yields on bonds could draw funds away from a zero‑yield asset like Bitcoin.

BTC vs. Gold and Equities

Despite the challenges, Bitcoin outpaced both gold and U.S. equities over the past year. On a 12‑month basis, BTC gained about 58%, compared to gold’s 46% and the S&P 500’s 11%.

The BTC/gold ratio would need to reach 40 to restore BTC’s lead over gold, a point some chartists view as a key upside target.

This week alone, the BTC/gold ratio rose just 1.5%, demonstrating stable relative performance even amid Middle East geopolitical tensions. Bitcoin’s holding power contrasts with gold’s more volatile moves during regional risks.

Horsley believes these two trends—alternative high‑return tokens and bond competition—aren’t urgent threats today but could surface as headwinds in coming quarters. Investors and traders should watch shifts in ETF flow patterns and yield curves.

For now, Bitcoin’s spot‑ETF era looks firmly established. But if DeFi tokens continue to skyrocket or Treasury yields remain elevated, the price of Bitcoin may face stiffer competition for capital.

The post The Price of Bitcoin May Face These Two Key Risks – Bitwise CEO appeared first on The Coin Republic.