Bitcoin ( BTC -0.33% ) An investment that has gained over 10,000% in the last ten years is Bitcoin. However, opinions on this cryptocurrency differ. Renowned investor Warren Buffett has stated that he would not buy all the Bitcoin in the world even for $25. Conversely, some individuals support its potential. MicroStrategy Michael Saylor, the founder, is of the opinion that Bitcoin plays a vital role in the worldwide economy.
Saylor shared his thoughts on Bitcoin’s future price at the 2024 Bitcoin conference, predicting that it will hit $13 million per coin by 2045, which is approximately 20,000% more than its current value.
Saylor is not just making claims; he is said to possess around $1 billion in Bitcoin, while his company, MicroStrategy, has acquired 226,500 bitcoins valued at approximately $13.6 billion.
Is his daring forecast valid? Is it advisable for investors to purchase Bitcoin at current prices?
Here is the information you should be aware of.
Is the $13 million Bitcoin price target set by Michael Saylor achievable?
Before becoming overly enthusiastic about The potential for investment in Bitcoin Investors need to recognize that Saylor’s price forecast is extremely positive. Saylor is renowned for being a Bitcoin whale Given his history of making daring statements, it should come as no surprise that he has made a confident forecast. However, is there any factual basis to support this claim?
Let’s quickly calculate some rough estimates.
While Bitcoin is denominated in dollars, investors can gain insights into the values of both assets by comparing it to gold. The Federal Reserve can be described as the central banking system of the United States. The dollar can be impacted by various factors, while gold, similar to Bitcoin, is predominantly influenced by the dynamics of the open market. Additionally, both gold and Bitcoin are recognized and valued on a global scale.
By calculating the total value of all the gold in the world, which is approximately 208,874 metric tonnes, and then multiplying it by the current spot price per ounce of $2,471, the resulting sum is around $16.5 trillion. Assuming a 3% increase in the total supply of gold last year, we can speculate that this rate might persist annually for the next two decades, although this projection could be optimistic.
By 2045, the total global gold supply is projected to reach approximately 377,357 metric tonnes. Over the past 20 years, the spot price of gold has increased by 519%. Assuming the same rate of increase until 2045, the spot price would be $14,058 per ounce. Using these figures, the world’s gold supply would theoretically be valued at $170.5 trillion in 2045.
On this day, Bitcoin’s market cap The combined value of all the Bitcoin in existence is around $1.2 trillion. If the price of Bitcoin were to increase by 20,000% from its current value, the market capitalization would exceed $241 trillion, not taking into account the additional supply that will be added by 2045.
It may not be impossible for Bitcoin to replace gold as the primary asset of the world economy, but it would be quite challenging. For Bitcoin to reach such a level, significant growth would be necessary. Investors should consider managing their expectations accordingly.
This does not imply that investors should not feel excited
Always aim high because even if you don’t reach your goal, you may still achieve something great along the way.
Price targets, whether high or low, do not alter Bitcoin’s path as a decentralized digital currency. inflation As Bitcoin has been around for a while now, it is becoming increasingly difficult to dismiss its investment gains as mere luck. The consistent increase in its value indicates a genuine interest from society in Bitcoin as an alternative to traditional currencies like the U.S. dollar, especially as these fiat currencies weaken due to increased supply from policymakers.
Bitcoin is not yet widely practical for everyday use. While it is not commonly accepted for transactions like buying gas, there is a growing number of merchants that do take it as payment. Additionally, some businesses and governments are starting to acquire Bitcoin as a safeguard against traditional currency devaluation. If this trend persists, there is potential for Bitcoin’s value to continue to increase. As a digital asset with a finite supply, Bitcoin is valued in comparison to a depreciating currency like the U.S. dollar.
Should I purchase Bitcoin today?
The price of Bitcoin has shown to be very unstable, therefore investors should be cautious and not invest all at once. If you are interested in purchasing Bitcoin, consider following the approach used by Michael Saylor.
Invest in Bitcoin consistently over time by purchasing it at regular intervals. This strategy allows you to accumulate an investment at an average price, regardless of whether the price of Bitcoin is increasing or decreasing. By doing so, you can potentially achieve a satisfactory average price over the long run.
