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1 Top Cryptocurrency to Buy Before It Soars 12,500%, According to Michael Saylor
With Donald Trump back in office, investors are bullish not only about the stock market but also about the cryptocurrency industry. Favorable regulation for the latter, as well as business-friendly policies, could have encouraging results.
Even before the start of this year, Bitcoin (CRYPTO: BTC) supporter Michael Saylor was incredibly enthusiastic about the trajectory of the world's most valuable digital asset. His enthusiasm is a result of his outlook.
According to Saylor, Bitcoin's price will soar 12,500% from its current price of $103,000 (on the evening of Jan. 22) to $13 million in 2045.
20 years down the road
It's worth pointing out that Saylor's base case sets a $13 million price target on Bitcoin in 2045. That translates to a tremendous 27.4% annualized gain, which means Bitcoin would almost certainly outperform the S&P 500 index and the Nasdaq Composite index . In this scenario, he believes 7% of all global wealth will flow to Bitcoin. This would give the crypto a gargantuan $280 trillion market cap.
Saylor's bull case gives Bitcoin a $49 million price target in 2045, putting its market cap at an astronomical $1 quadrillion. Even the bear case is very optimistic, with Bitcoin's price rising at an average annual pace of 18.4% and hitting $3 million in 20 years.
Regardless of what number you focus on, Saylor is extremely cheerful about the direction Bitcoin is heading in. If you listen to any of his interviews, you'll realize that the overarching belief is that Bitcoin should be the main beneficiary of growing government debt burdens, constant fiat currency debasement, and ongoing inflation.
Bitcoin financial engineering
Saylor is putting his money where his mouth is. The software enterprise he co-founded and that he's executive chairman of today, MicroStrategy , first purchased Bitcoin in August 2020. As of Jan. 21, it held 461,000 Bitcoin on its balance sheet.
The company's market cap of $94 billion (as of Jan. 22) is largely the result of its Bitcoin position, as opposed to software sales. In essence, MicroStrategy is engaged in complex financial engineering, raising cash via debt and equity markets to fund Bitcoin purchases.
This activity has made Saylor a legend in the Bitcoin community. Despite what you might think about the riskiness of this endeavor, it provides investors with a way to gain adequate Bitcoin exposure through owning a stock.
Long-term conviction
I always believe that investors should take price targets, such as Saylor's $13 million target for Bitcoin, with a grain of salt. No one has any idea what the world will look like 20 years from now, let alone how the crypto industry, and Bitcoin specifically, will evolve. There are simply too many variables.
However, Bitcoin still deserves a place in a diversified portfolio . This is particularly true for long-term investors who can tolerate the volatility. The upside is certainly there, even though the crypto trades near record territory.
Bitcoin's fixed supply cap of 21 million coins is its defining characteristic. Because of the troubles of the current fiscal and monetary system that I mentioned earlier, namely rising government debt, currency debasement, and inflationary pressures, investors are gravitating toward a purely digital and decentralized asset whose supply cannot be increased.
Bitcoin is a tiny fraction of the global economy today. As investors become more educated about it and build conviction, I expect that figure to steadily climb. This is what Saylor expects, too.
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