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Bitcoin is entering a new phase that justifies larger investment allocations, Bitwise investment chief Matt Hougan says.

“Bitcoin’s sideways slog reveals its IPO moment has arrived,” Hougan said on Nov. 4 in a post on the firm’s website, adding, “that means bigger allocations.”

Hougan cited the recent writings of 22V Research Senior Managing Director Jordi Visser.

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Visser said Bitcoin’s sideways movement despite a deluge of positives resembled an initial public offering. Early investors with significant profits are cashing out and diversifying, he said. He said this distribution is reflected in sideways price movement, adding that it could continue for months before sellers are exhausted.

Building on Visser’s thoughts, Hougan said Bitcoin was now “significantly less risky” as it transitioned from early adopters to institutional investors like many post-IPO companies. Hougan said this reduced risk was evident in the asset’s volatility, which has significantly tanked since the launch of spot BTC ETFs in January 2024.

The takeaway, according to Hougan? “The days of a 1% allocation to bitcoin are over.”

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The 1% Bitcoin allocation recommendation is a common baseline offered by several leading financial institutions, including BlackRock (NYSE:BLK). However, according to Hougan, “investors need to be thinking of 5% as a starting point” as Bitcoin supposedly matures. He said this shift was already in the works, citing “hundreds of meetings Bitwise has had with advisors, institutions, and other professional investors over the past several months.”

“Bitcoin is going through its IPO moment. If history is any guide, we should celebrate by buying more,” he said.

Hougan in the Nov. 4 memo reiterated Bitwise’s view that Bitcoin would reach $1.3 million by 2035, adding that this prediction could prove conservative. He said that, unlike post-IPO companies that needed to continue innovating and growing to see valuations rise, Bitcoin only needed to be widely accepted to grow from a $2.5 trillion asset to a $25 trillion asset, the size of gold.

Bitcoin was most recently trading at $102,000. Bitwise predicts that the asset would reach $200,000 by year-end.