Here's a different way to think about Bitcoin (BTC): it's not a commodity or a company, it's a service. And services can be worth trillions.

That's the pitch from Matt Hougan, Bitwise's Chief Investment Officer, in his latest memo. Bitcoin's value, he argues, doesn't come from producing earnings or having physical utility. Instead, it stems from what it does—letting people store wealth digitally without relying on governments, banks, or any middleman.

Think about Microsoft. We value it based on how many people want its software. Bitcoin works the same way: its price scales with demand for non-intermediated, censorship-resistant wealth preservation. The difference? There's no subscription model. If you want the service, you have to own the asset itself.

And demand is climbing. Harvard's endowment, sovereign wealth funds, and top-tier investors are increasingly seeking exactly what Bitcoin offers. As the world goes more digital and government debt keeps piling up, Hougan expects that demand to accelerate over the long haul.

Back in November, Hougan referenced macro strategist Jordi Visser's concept of Bitcoin being in a "silent IPO" phase—similar to Facebook or Google as they transitioned from startup risk to mainstream institutional adoption. The sideways price action we're seeing? That's a healthy distribution phase, with early holders cashing out massive gains into deep institutional buying.

Hougan isn't backing down from his bold forecast: $1.3 million per BTC by 2035. He views the current environment as a major accumulation window and suggests professional investors should now consider 5%, not 1%, as the baseline portfolio allocation to Bitcoin.