When viewed as a separate asset, Bitcoin (BTC 0.83%) is hands down the best-performing one in the past decade. As of July 7, its price had skyrocketed 40,550% since the same date in 2015. That gain is significantly higher than what the stock market, U.S. Treasuries, or gold did during the same time.
Although the returns of the past surely won't repeat, I believe the good times will continue. I predict that this leading cryptocurrency will be worth $1 million per coin in 10 years.
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See the present clearly
Bitcoin has come a long way. What was once a funny internet money that sparked interest among cypherpunks has now become a global financial asset. Bitcoin can now be taken seriously, with its market cap of almost $2.2 trillion.
One key risk, which is that governments would get involved and ban Bitcoin, is now fading into irrelevance. The U.S. government plans to create a Strategic Bitcoin Reserve, while the Securities and Exchange Commission (SEC) approved spot Bitcoin exchange-traded funds (ETFs) last year. These are signs pointing to Bitcoin not going away anytime soon.
Companies are starting to invest in and hold Bitcoin directly on their own balance sheets. Financial institutions can hold Bitcoin in custody on behalf of clients without the requirement to hold extra risk capital against it. And it was also just announced that Bitcoin would be recognized as collateral for mortgages.
It's impressive seeing Bitcoin's rise from a grassroots movement driven by individuals to a global asset that's embraced by big and powerful institutions. It's best not overthink this. The historical trend points to Bitcoin's rise continuing for the foreseeable future.
Scarcity drives demand
Bitcoin's price has soared during the past decade because the world is starting to understand how valuable it is to own a scarce asset. Bitcoin has a fixed supply cap of 21 million coins, enforced by a halving cycle that occurs roughly every four years. The last one happened in April 2024, with the next halving expected in April 2028.
Governments, especially the U.S., continue to run huge fiscal deficits. At the same time, the money supply keeps expanding at a rapid pace. This backdrop of growing liquidity in the financial system results in constantly debased fiat currency. However, it also leads to a risk asset like Bitcoin benefiting as more money seeks higher returns.
The Trump administration just passed the "big, beautiful bill," which will extend tax cuts, reduce Medicare and food benefits, and increase defense spending. According to the Congressional Budget Office, this will increase the fiscal deficit by $3.3 trillion during the next decade. It doesn't matter what politicians say about balancing the budget. Debt and spending will continue to be the main macro theme, which plays to Bitcoin's benefit as a fixed-supply asset.
Getting to $1 million
Bitcoin's present situation shows that it has cemented itself as a legitimate financial asset. Its scarcity, with a hard supply cap of 21 million units, stands impressively against fiat currency debasement.
This favorable setup gives me confidence that Bitcoin's price will rise roughly 900% to reach $1 million in 10 years. Gold is often compared to Bitcoin because they are both neutral, global, and scarce assets. The precious metal has a market value of $22.2 trillion, about 10 times higher than Bitcoin. It's not a stretch to expect the crypto to match gold's value in 2035.
It's worth highlighting that Bitcoin has much better qualities than gold. Bitcoin is portable, divisible, and verifiable. And it can be used in transactions. Plus, Bitcoin looks likely to be a key financial instrument in a world that is only becoming increasingly digital.
Therefore, maybe a $1 million price target will prove to be conservative in the grand scheme of things, as Bitcoin should eventually be worth much more than gold.
