Currently, there are over 85,400 of them Bitcoin (CRYPTO: BTC) according to the latest data, millionaires in the world Cryptocurrency Wealth Report Henley & Partners. That’s significantly more than any other cryptocurrency and tells you everything you need to know about Bitcoin’s performance over the past decade. For seven of the last 10 years, Bitcoin has been the world’s best-performing asset, and it’s not even close.
This stellar performance transformed Bitcoin from a small $100 cryptocurrency in 2013 to the $60,000 behemoth it is today. If you bought Bitcoin early and then held on to it through multiple market downturns, there’s a good chance you’re a millionaire. But what now? Will investing a similar amount in Bitcoin today also make you a millionaire?
Millionaire math
Let’s start with millionaire math. For the sake of argument, let’s assume you have $1,000 to invest today and you plan to invest it all in Bitcoin. To turn that $1,000 into $1 million, you’d need to see a 1,000x return on your investment.
How realistic is this? Some of the most optimistic price predictions say that Bitcoin will reach a price of $1 million by 2030. Given Bitcoin’s current price of $60,000, this would represent a 16x return on investment. That’s an impressive number, but it doesn’t equal the 1,000x return you’d need. And that’s not even close to the 600x return that Bitcoin has enjoyed over the last decade.
To achieve a 1,000x return, Bitcoin would need to reach a price of $60 million. Taking into account Bitcoin’s maximum supply over the entire period of 21 million coins, this translates to a market capitalization of over $1 trillion! This number easily exceeds the total value of the global stock market ($100 trillion). And this is even more than the value of the entire world’s wealth, which is estimated at nearly $600 trillion by 2027. So a target price of $60 million isn’t very realistic given the relative size of today’s financial market. markets.
Bitcoin’s millionaire scenario
But all is not lost if you are determined to become a Bitcoin millionaire. Many smart people actually believe that Bitcoin can get closer to its $60 million price target.
For example, in July Michael Saylor from MicroStrategy Inc. (NASDAQ:MSTR) predicted that Bitcoin will reach $13 million by 2045. This was his base scenario. His scenario assumed that Bitcoin would reach $49 million. And if you spend just a few minutes on YouTube, you can quite easily find investors predicting Bitcoin’s future price of $100 million or more.
What all of these outlandish price predictions have in common is the fundamental belief that Bitcoin will one day replace the US dollar as the global reserve currency. It is believed that after a long enough period, the modern financial system will eventually abandon the dollar and adopt Bitcoin.
According to this scenario, the US’s growing debt mountain ($35 trillion) will one day collapse. At some point, it will no longer be possible to print more money to cover this debt. So there will be a dollar crash and dollar-denominated assets will fall in value. As a result, the world will need to find a new reserve currency and this is where Bitcoin comes into play. Just as the world once operated on the gold standard, one day the world will operate on the Bitcoin standard.
Is Bitcoin still the best producer of millionaires?
Be careful what you wish for. If you hope to become a Bitcoin millionaire with a modest $1,000 investment, then the only way that can happen is if the entire financial system collapses and Bitcoin takes over.
That being said, I remain bullish on Bitcoin for the long term and believe its value will continue to rise over the next decade. But I also realize that someone is much more likely to become a millionaire by investing in a cryptocurrency other than Bitcoin.
The key is to find a cryptocurrency that looks similar to Bitcoin in 2010, when someone was willing to pay 10,000 Bitcoin for two pizzas. If you are able to buy this cryptocurrency while it is still trading at a very low price and then hold it for years as it rapidly appreciates in value, you might just find yourself doing very well one day.
Should you invest $1,000 in Bitcoin now?
Before you buy Bitcoin stocks, consider this:
The Motley Fool Stock Advisor a team of analysts have just identified what they think it is Top 10 stocks for investors to buy now… and Bitcoin wasn’t one of them. 10 stocks that made a cut could deliver monster returns in the coming years.
Consider when Nvidia created this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you would have $765,523!*
Stock advisor provides investors with an easy-to-follow blueprint for success, including portfolio-building tips, regular updates from analysts, and a selection of two new stocks each month. The Stock advisor the service has more than four times return of the S&P 500 since 2002*.
See 10 stocks »
*Stock Advisor returns from October 7, 2024
Dominic Basulto has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.
Will investing $1,000 in Bitcoin make you a millionaire? was originally published by The Motley Fool
#investing #Bitcoin #millionaire