Currently there are more than 85,400 Bitcoin (CRYPTO: BTC) millions in the world, according to the latest Crypto Wealth Report from Henley & Partners. That’s more than any other cryptocurrency and tells you everything you need to know about Bitcoin’s performance over the past decade. Over the past seven years, Bitcoin has been the world’s most valuable asset, and it’s not even close.
This stellar performance transformed Bitcoin from a tiny $100 crypto in 2013 to the $60,000 behemoth it is today. If you bought Bitcoin in the morning and then held on during its market downturn, there is a high probability that you are a millionaire. But what now? Will investing the same amount in Bitcoin today make you a millionaire?
Millionaire math
Let’s start with some millionaire math. For the sake of argument, let’s assume you have $1,000 to invest today and plan to invest it all in Bitcoin. To turn that $1,000 into $1 million, you need to see a thousand return on your investment.
How true is that? Some very bullish price predictions call for Bitcoin to reach a price of $1 million by 2030. Assuming Bitcoin is priced at $60,000, that would mean 16 times the return of your money. That’s an impressive number but nowhere near the 1,000 returns you might want. And nowhere near the 600 times returns Bitcoin has enjoyed over the past decade.
To get a 1,000 times return, Bitcoin would need to reach a price of 60 million. Considering Bitcoin’s lifetime value of 21 million coins, that means a market cap of more than $1 quadrillion! That number is easily higher than the value of the world market ($100 trillion). And it is even more than the value of the entire economy in the world, which is estimated to be close to $ 600 trillion by 2027. Therefore, the goal of the price of $ 60 million is not very real if you consider the size of the current money. markets.
The million-maker situation of Bitcoin
But all is not lost if you are determined to become a Bitcoin millionaire. Many smart people think that Bitcoin can get close to the $60 million price target.
In July, for example, Michael Saylor of History of MicroStrategy Inc. (NASDAQ: MSTR) he predicted that Bitcoin would reach $13 million by 2045. That was his base-case scenario. His bull-case scenario called for Bitcoin to reach $49 million. And if you spend a few minutes on YouTube, it’s easy to find investors predicting the future price of $100 million or more for Bitcoin.
What all these price-fixed speculations have in common is the basic belief that Bitcoin will one day replace the US dollar as the world’s reserve currency. Long enough, the thinking goes, the current financial system will eventually abandon the dollar and embrace Bitcoin.
According to this situation, the growing mountain of debt in the United States ($35 trillion) will one day collapse. At some point, it is no longer possible to print more money to cover this debt. Therefore, there will be a collapse of the dollar, and dollar assets fall in value. As a result, the world will need to find a new currency to save, and this is where Bitcoin enters the picture. As the world once ran on the gold standard, the world will one day run on the Bitcoin standard.
Is Bitcoin still the best millionaire maker?
Be careful what you wish for. If you hope to become a Bitcoin millionaire with a modest $1,000 investment, then probably the only way it will happen is if the entire financial system collapses and Bitcoin takes over.
That being said, I am still long-term bullish on Bitcoin and believe it will continue to increase in value over the next decade. But I also know that it is much more likely for someone to become a millionaire by investing in another cryptocurrency other than Bitcoin.
The key is to find a cryptocurrency that looks like what Bitcoin did in 2010, when someone wanted to pay 10,000 Bitcoins for two pizzas. If you can buy this cryptocurrency while it is still trading at a low price, and hold onto it for years as it quickly appreciates in value, then you might just find yourself sitting on a very nice nest egg one day.
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Dominic Basulto has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.
Can Investing $1,000 in Bitcoin Make You a Millionaire? first published by The Motley Fool
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