With nearly $12 trillion in assets under management, BlackRock is one of the world's largest investment firms. As a result of its scale, it has introduced numerous exchange-traded funds (ETFs) to the market. Perhaps none have been more successful in such a short period of time than one that was launched early in 2024.
Investors that are bullish on its underlying asset should be extremely intrigued. In fact, one prominent billionaire's forecast implies that this BlackRock ETF could soar 12,400% during the next 20 years.
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Bullish on Bitcoin
In the past decade, Bitcoin has soared 46,760% (as of June 2). This likely makes it the single-best-performing asset during that time. Today, its price sits at about $106,000, not too far off its record high of $112,000 reached last month.
Michael Saylor, the co-founder and executive chairman of MicroStrategy, now called Strategy, who has a net worth estimated to be $9.4 billion, believes the party is far from finished. His base-case view is that by 2045, one Bitcoin will be worth an astonishing $13 million. Based on Bitcoin's current price, this implies 125-fold upside.
The analysis is quite simple. Saylor's view is that more of the world's wealth, particularly money that today might be stored in real estate, bonds, or stocks, will flow to Bitcoin. That base-case scenario expects 7% of global assets in Bitcoin.
A more bullish situation has 22% Bitcoin penetration, with a monster price target of $49 million. The bearish outlook is also quite positive -- with just 2% of assets in Bitcoin, Saylor thinks a worst-case outcome is a $3 million price tag by 2045.
It doesn't matter what your perspective is with regard to what price Bitcoin will hit one day. It's very difficult, if not impossible, to correctly forecast something so precise that far in the future.
What matters right now is whether you are bullish on Bitcoin. Saylor obviously is. He completely upended his company's operations by transforming it into a Bitcoin holding entity in 2020. Today, Strategy owns more than 580,000 Bitcoin units, making it by far the biggest corporate holder.
It's all about convenience
In January 2024, the Securities and Exchange Commission approved the launch of spot Bitcoin ETFs. The one that has amassed the most assets is BlackRock's iShares Bitcoin Trust (IBIT 3.42%). The ETF owns Bitcoin, and its objective is to track the cryptocurrency's price movements.
There are benefits to owning this ETF. Investors can buy and sell it directly within their traditional brokerage accounts; there is no need to figure out self-custody solutions or open up a crypto-specific account and wallet. This can be ideal for those who have zero interest in learning how to do these things.
The iShares Bitcoin Trust can be particularly appealing to larger pools of capital, like hedge funds, asset managers, pension funds, and sovereign wealth funds. These entities often have specific mandates restricting what kinds of assets they are allowed to invest in. While they might not be allowed to buy Bitcoin directly, owning this ETF could be an option to gain exposure. It's a regulatory-friendly way to bet on Bitcoin.
The cost is low, too. The iShares Bitcoin Trust carries an expense ratio of just 0.25%. Over time, investors in this ETF keep more of their money -- a winning outcome.
Saylor's base 2045 price target of $13 million for Bitcoin essentially implies a similar 12,400% gain for the iShares Bitcoin Trust. Investors who are interested in the billionaire's perspective should first and foremost take the time to learn more about Bitcoin before putting any money to work.
