Bitcoin (BTC +0.31%) is ready to start the new year on a better footing. It had a disappointing showing in 2025 as its price dipped about 6% while the stock market put up a double-digit percentage total return. And a competing store-of-value asset, gold, soared last year. Investors might be down on Bitcoin's prospects in the face of these better performances.
It's always a smart idea for investors to take a step back and understand the bigger picture. When they do this, they will still have a positive view of Bitcoin. But is the world's most dominant cryptocurrency a millionaire-maker investment opportunity?
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Bitcoin has generated tremendous wealth in the past
It's important to look at where Bitcoin has been in the past. This is one of the best-performing assets in recent history. Data from BlackRock, the gargantuan investment manager that has trillions of dollars in assets under management, shows that Bitcoin produced a better return than all other asset classes in eight of the 11 years from the start of 2013 to the end of 2023. And in 2024, the digital asset climbed 119%. That's an impressive track record that's hard to argue with.
Bitcoin is a global macro asset whose price is influenced by market sentiment and changing liquidity. Over any shorter time horizon, things can fluctuate. The longer-term picture, however, is impossible to ignore. Bitcoin's price has skyrocketed 21,140% in the past decade (as of Jan. 13).
The foundation is strong
In the early days, Bitcoin was viewed as an extremely risky asset. I think the risk subsides with each passing year. For starters, the network remains incredibly robust in its security. Beyond that, Bitcoin's hash rate, the amount of computing power that miners are deploying to help process transactions on the blockchain, has been growing remarkably steadily. This is a key fundamental metric.
Bitcoin is being integrated into the traditional financial system. Investment vehicles and payment methodologies are the most obvious examples here. And it seems Bitcoin is being viewed more favorably by politicians as time passes.
Looking out a decade or beyond, I have confidence that Bitcoin will continue on this path. Companies will keep finding ways to innovate and adopt Bitcoin. And there will be greater regulatory acceptance. These trends will support Bitcoin being a less risky asset to own.
CRYPTO: BTC
Key Data Points
Investors who study Bitcoin have every reason to be bullish
For an asset to make its investors into millionaires, it probably needs a 100-fold gain during the next 25 years. This translates to a superb 20% annualized return. And it means that a $10,000 starting cash outlay will rise to $1 million.
Viewed through this lens, does Bitcoin have what it takes to bring investors to the promised land? I wholeheartedly believe that it does. That 20% annualized gain actually would be a deceleration for Bitcoin based on its past returns. However, it's critical that investors who buy this asset do their homework and truly understand what they own.
To be clear, though, no one has any clue what the price of Bitcoin will be. The biggest bull out there is Michael Saylor, founder and executive chairman of Strategy. His price target of $21 million in 2046 is more than 215 times Bitcoin's current price of about $97,000. If his forecast is accurate, an investment of about $4,500 today will make you a millionaire in 20 years. This is an extremely optimistic scenario.
Making price predictions is a difficult game to play. At the end of the day, Bitcoin has had tremendous upside over the long run. And it can lift the prospects of a diversified portfolio.
