It's undeniable that Bitcoin (BTC 2.13%) has created its share of millionaires during the past decade. According to last year's "Crypto Wealth Report" from Henley & Partners, there are now 85,400 Bitcoin millionaires in the world, and the number continues to grow at a rapid pace.
There's a good reason for that. For much of the past decade, Bitcoin has been the top-performing asset in the world. But how much longer can Bitcoin continue to grind out these head-spinning returns? If you're hoping to become a crypto millionaire, it's essential to get the answer to this question right.
Institutional adoption
Right now, the key investment thesis for Bitcoin is institutional adoption. In other words, it's no longer just individual investors who are buying Bitcoin. It's now corporations, Bitcoin treasury companies, and even sovereign governments. Everyone these days, it seems, is trying to buy as much Bitcoin as they possibly can.
Take Strategy (MSTR 0.57%), for example. The company formerly known as MicroStrategy has been on an epic Bitcoin-buying binge since August 2020 and currently ranks as the largest corporate Bitcoin holder in the world, with a stash worth an estimated $72 billion. Inspired by Strategy's example, dozens of other companies are now reinventing themselves as Bitcoin treasury companies.
At the same time, the U.S. government has become a huge proponent of Bitcoin. The big step this year was the proposed establishment of a Strategic Bitcoin Reserve. Right now, this fund would only be allowed to acquire Bitcoin in a budget-neutral way. In other words, it could't use taxpayer money to buy more Bitcoin. Yet, it's likely that the government will find a workaround. Some have suggested, for example, that tariff revenue might be used to fund Bitcoin purchases.
Is Bitcoin really going to hit $21 million per coin?
So, given all this institutional adoption, it's easy to see why analysts, investors, and Bitcoin evangelists are steadily cranking up their future price estimates. At one time, setting a price forecast of $1 million was considered a bold predication. Today, it's the base case scenario. According to Michael Saylor, founder and executive chairman of Strategy, his price target now is $21 million in 21 years.

Image source: Getty Images.
So let's do the math. Currently, Bitcoin trades for about $114,000. For Bitcoin to hit $21 million, that implies a compound annual growth rate (CAGR) of 28%. For most assets, that would be impossible. No asset grows at a CAGR of 28%! But this is Bitcoin we're talking about here. For Bitcoin, an annual return of 28% is considered a down year. This year, for example, Bitcoin is only up 22%, and it feels like a huge disappointment.
So, if you're trying to become a millionaire, you would need to invest $5,476 today in Bitcoin and then wait 21 years. Theoretically, if Bitcoin delivers on those forecasted 28% annual returns, you might just get there.
Stress-testing Bitcoin's millionaire-maker assumptions
There's just one minor problem. All of this assumes that Bitcoin will continue to perform much like a high-flying tech stock. But what if Bitcoin starts to perform like digital gold, a term many use to describe its store-of-value qualities? That was the case earlier this year when investors sought out safe assets amid tariff uncertainty and landed on Bitcoin as a potential alternative.
And this is where things get interesting. If Bitcoin really is digital gold, as many investors now claim, then shouldn't it also perform like gold? During the past 10 years, the compound annual growth rate of gold has been about 10%. That's nowhere near the 28% annualized return for Bitcoin forecasted by Saylor.
So, let's run the numbers again, this time with a new CAGR of 10%. The results are not nearly as impressive. If we assume a CAGR of 10.8%, then Bitcoin will hit a price of $1 million after 21 years.
That's impressive, but it also means that investors are going to be facing a much bigger initial investment. Instead of only investing $5,476 upfront, an investor would need to invest $115,000. Suddenly, Bitcoin has gone from a cheap bet to a huge wager that few risk-averse investors will be comfortable taking.
And don't forget -- the price of Bitcoin does not just go straight up. If history is any guide, the price of Bitcoin tends to collapse every few years. For its entire existence, Bitcoin has very much been a boom-or-bust asset. During a span of 21 years, Bitcoin could have several severe downturns. We recently saw an example of this in 2022 when Bitcoin's price fell by 65%.
At the end of day, Bitcoin is still a potential millionaire maker due to its tremendous upside potential and the unprecedented level of institutional adoption. But just be aware -- the days of turning a few thousand bucks into $1 million may be over. These days, you might need to invest as much as $100,000 upfront to realize those crypto millionaire dreams.