Bitcoin (BTC +1.10%) has been facing immense selling pressure lately. As of Nov. 18, the top cryptocurrency is down 26% from its peak, which was established in early October. However, the long-term thesis hasn't changed.
In my view, Bitcoin's price will triple to roughly $300,000 by 2030. There's a clear catalyst.
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Scarcity is the most important factor
There will only ever be 21 million Bitcoin units in circulation one day. This hard supply cap is the cryptocurrency's most attractive characteristic. And it goes against how the monetary system operates.
Over the past 15 years, the M2 money supply of the world's four largest central banks has expanded by 145%. This has coincided with rising debt levels. There is no end in sight to this worrying trend.
Combine a fixed-supply asset with ever-increasing levels of fiat currency, and it makes sense why Bitcoin's price has shot up historically.
CRYPTO: BTC
Key Data Points
Expect lower returns
Since mid-November 2020, Bitcoin has climbed 416% (as of Nov. 18). This translates to a superb 39% compound annual growth rate. While it's easy to be bullish, investors should still expect forward returns to be lower than what was achieved in the past.
Bitcoin is becoming a more mature asset, so the gains will naturally come down. However, seeing its price triple by 2030 is a totally realistic outcome.
