Since Donald Trump was elected president on November 5, Bitcoin has experienced a significant upward trend, reaching a historic high of $93,300.
Since then, BTC has been trading in a narrow range between $89,000 and $92,000, preparing for a potential move towards the $100,000 milestone. This raises an interesting question of whether a price of $1 million per coin is feasible within the next decade.
Long-term vision of investors
Market expert VirtualBacon has conducted an in-depth analysis of these possibilities, exploring the numbers, trends, and catalysts that could propel Bitcoin nearly 1,000% from its current price levels.
In the current market cycle, experts predict that Bitcoin could reach $200,000 in the next one to two years. However, he points out that while this milestone is significant, altcoins may offer higher returns with greater risks, often plummeting 80% to 90% in a bear market.
Compared to altcoins facing increasingly stringent regulatory scrutiny, Bitcoin is a safer long-term investment. VirtualBacon believes Bitcoin's potential is not limited to the next few years, but spans a decade or longer.
To understand why Bitcoin's price might reach $1 million, VirtualBacon asserts that investors need to consider its fundamental utility as a store of value. The fixed supply of 21 million Bitcoins, its global accessibility, and its resistance to censorship and manipulation make it an attractive alternative to traditional financial assets.
The expert suggests that if Bitcoin is to be recognized as the digital gold of the 21st century, reaching a market value comparable to gold's estimated $13 trillion is not only a theoretical possibility but a 'logical outcome.'
The main drivers of this potential growth include increased participation from asset management firms, corporate treasury bonds, central banks, and the wealthy. Recent data shows that inflows into Bitcoin ETFs reached a historic high, with $1 billion invested last week, reflecting growing institutional confidence.
Additionally, discussions among companies, such as Microsoft considering Bitcoin reserves, further enhance its strategic value. The wealthy are also beginning to adopt Bitcoin as a standard portfolio allocation, with even a modest 1% investment becoming commonplace among billionaires.
What does Bitcoin need to reach $1 million?
To bring Bitcoin to the $1 million mark, two key factors must be analyzed: global wealth growth and portfolio allocation. VirtualBacon notes that in 2022, global total wealth is estimated at $454 trillion, with forecasts suggesting it could grow to $750 trillion by 2034.
Currently, gold accounts for about 3.9% of global wealth, while Bitcoin only accounts for 0.35%. If Bitcoin's allocation in global portfolios rises to just 3%, still far below gold's share, its market value could soar to $20 trillion, pushing the price to $1 million per coin.
Historically, the market capitalization of gold has seen significant growth following the launch of exchange-traded funds in 2004, with its portfolio allocation increasing from 1.67% to 4.74% over the next decade.
If Bitcoin follows a similar trajectory, its allocation could rise from 0.35% to 1.05% or more, translating to a market value of approximately $7.92 trillion, equivalent to about $395,000 per Bitcoin. Therefore, reaching $1 million does not require Bitcoin to surpass gold; by 2034, it would need to occupy about 57% of gold's expected market value.
With gold accounting for 4.7% of global portfolios and Bitcoin at 0.35%, a slight increase in Bitcoin's share of global wealth to 3% (only 60% of gold's allocation) could 'easily' lead to a market value of $20 trillion and a price point of $1 million.
At the time of writing, the trading price of BTC is $92,240, up 7% weekly.