At the Token2049 cryptocurrency conference in Dubai on April 30, Arthur Hayes, the co-founder of the crypto exchange BitMEX, made a bold prediction about the future of Bitcoin (BTC 1.56%).
"Don't worry," Hayes said, "Bitcoin is going to $1 million by 2028." He isn't the only big figure in crypto to make similar predictions, give or take a couple of years.
Could Hayes be right? Let's break down the numbers here and assess how realistic it is for Bitcoin to go to $1 million in the next three years or so.
CRYPTO: BTC
Key Data Points
It's a lot more realistic than it sounds
Right now, Bitcoin is priced at around $96,000. Therefore, it would need to grow by 10.4 times to reach a price of $1 million per coin. For most assets, this would be impossible.
Over the last five years, the coin's price rose by 949%. So, there's a recent precedent for it exhibiting the scale of growth that's in the right ballpark for it to hit the price target in question, albeit over a slightly longer period than the roughly three-year timeline we're considering here.
Let's look at this issue from a slightly different angle to better understand whether hitting the target is plausible. Today, Bitcoin's market cap is $1.9 trillion. At a hypothetical $1 million per coin, given the 20.5 million coins that are likely to have been mined by 2028 (up from the 19.8 million that are in circulation today), Bitcoin's market cap would need to be approximately $20.5 trillion.
For reference, as of the end of 2023, around $213 trillion was held in investment assets on the global market. If we assume that over the next few years, 2% of that sum will be allocated to Bitcoin as a result of institutional investors buying it to gain exposure, it would result in around $4.2 trillion in inflows. In isolation, that still obviously wouldn't be enough to drive the coin's market cap up enough for it to reach a level where each coin would be priced at $1 million.
However, several factors will constrain the floating supply of Bitcoin available for purchase, which might do the trick of juicing prices up as a result of scarcity. In particular, countries are considering whether to implement Bitcoin repositories which, if implemented, would result in them taking some supply off the market. Likewise, several major corporations are starting to accumulate the asset. They won't sell it unless they desperately need the cash, as long as they think it will be more valuable in the future than it is now.
Furthermore, Bitcoin's next halving will occur in early to mid-2028. Halvings tend to cause some purchasing in advance, driving prices up, and then even more purchasing in the following year as supply dries up. As the Bitcoin supply will only get harder to generate with each successive halving, the trend so far has been for prices to rise to a higher level than before -- permanently.
There's no need to hold your breath
In short, under the right set of conditions, there is a solid chance that Bitcoin could reach $1 million per coin by 2028.
But there's a much higher chance that it'll reach that same target in the years that follow, as 2028 is relatively soon, and Bitcoin's main price mechanisms work the strongest over longer periods. Given all of the geopolitical instability of the world right now, a lot could happen in the next few years that'd send financial markets, including Bitcoin, into a roller coaster ride rather than leaving them in a smooth climb as investors would prefer.
The important thing here is not to get too hung up on the asset's exact price. The coin is a good investment regardless of whether it reaches $1 million in a few years or longer; the market-powered drivers of Bitcoin experiencing higher prices in the future should be your reason for investing, not its price crossing some arbitrary mark.
If Bitcoin's price is going to continue increasing over the long term -- and it probably will given its scarcity and supply dynamics -- it's worth buying and holding regardless of whether Hayes' prediction is proven true in the near term.
