In the past decade, the price of Bitcoin has risen from $100 to around $65,000. MicroStrategy’s CEO Michael Saylor thinks it might get as high as $13 million by 2045 for a 20,000 per cent gain. The optimistic outlook is driven by Bitcoin’s increasing institutional and corporate adoption, as well as the classic economic pressures applied by scare supply against rising demand. The total supply of Bitcoin will be limited to 21 million coins, of which 19.8 million have already been mined.
Along with this, Bitcoin stands to compete with the US dollar as a global reserve currency, given its attributes of ‘sound money’ (as opposed to ‘fiat money’, such as the dollar, which has the potential to devalue in an economy beholden to high levels of national debt, such as the US’s $35 trillion debt). As fiat currencies continue to weaken, an increased demand for Bitcoin could lead to an explosion of its mainstream finance by 2025 A digital gold rush could be on the horizon. As the world enters the newfound era of post-pandemic ‘digital everything’, we could be on the cusp of considerable growth for Bitcoin – if investors are careful not to get swept up in overly rosy valuations that would place the Bitcoin’s price far above that of traditional assets.
The fact that Bitcoin increasingly appears to be a viable candidate for the role of a core player in future financial infrastructures is, at least, increasingly coming into the open. The increasing diversification of foreign reserves out of traditional (fiat) currencies, as well as the repeated rise in U.S. national debt ceilings, point to changing dynamics in which Bitcoin might well be allocated a larger share. A $13 million valuation might still be unbelievable. Yet Microstrategy is committing to a significant portion of its assets to Bitcoin. It is going deep. And it is buying more with newly issued debt. This suggests it believes in both that its investment will play a significant future role and that there are significant returns ahead. So those considering Bitcoin investments might do well to think of them as part of a very long play.
Source: Yahoo! Finance
