Seeing one of your portfolio's positions generate a 10-year return of 50,000% is truly mind-boggling. But this is exactly what Bitcoin (BTC 1.21%) has done (as of Sept. 17). A $2,000 starting investment in September 2015 would be worth $1 million today.
With such a fantastic historical return, it's understandable if investors think that it's too late to put money to work. But that's a pessimistic view. Here's the biggest reason you haven't missed out on Bitcoin.
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Unsustainable financial situation
It's safe to assume that the U.S. federal debt, now at $37 trillion, will keep increasing in the decades ahead. It doesn't matter who's in the White House. The country will continue to run massive fiscal deficits. For what it's worth, the last surplus was in 2001.
This unfavorable trend supports ongoing growth in the money supply, as the government keeps borrowing to fund spending. Something must eventually break.
The counterargument is that because the U.S. has the biggest and most powerful economy, and the U.S. dollar is the global reserve currency, things can continue on this path. To be fair, unsustainable trends can last longer than people might think.
But the situation is becoming more fragile as time passes. Imagine if you kept opening new credit cards to pay off the balances of your old cards. This is financially reckless, but this is essentially what the U.S. government does.
CRYPTO: BTC
Key Data Points
Capital flowing to a scarce asset
Bitcoin has a fixed supply of 21 million units. No single entity has control over it. It transcends borders. And it's permissionless. This makes it a unique asset for more capital to flow to, particularly as more money and debt keep being created in the financial system.
Therefore, as long as governments across the globe continue operating in fiscally irresponsible ways, Bitcoin will have uncapped upside.
