Bitcoin (CRYPTO: BTC) has skyrocketed in the previous decade, yet many doubt its future. Bitcoin is at record highs, so some investors may think it's too late to invest. It's just starting to shine as a standalone asset class. It's fine to doubt crypto, but few assets have the same track record and long-term upside potential. Let's investigate.
"I don't think it will generate a good return on investment" According to The Motley Fool Ascent's 2024 Cryptocurrency Investor Trends Survey, crypto mistrust has many causes. Strangely, one claimed that crypto cannot generate a good return. This reason was given by 29% of non-owners.
This worry seems unfounded given Bitcoin's previous returns. Bitcoin was the world's best-performing asset from 2011 to 2021. Annualized returns were 230%. Next closest asset class (high-growth tech equities) returned 20% annually. Bitcoin rose almost 150% in 2023 and 50% this year.
Wall Street has finally accepted Bitcoin as a standalone asset class due to its success. After years of naysaying, the world's largest financial institutions are finally realizing Bitcoin's unique risk-reward profile and why many investors should hold it. Institutional investors are pouring money into new Bitcoin exchange-traded funds (ETFs). Over $30 billion has entered these ETFs in three months.
Is Bitcoin investment too late? Skeptics will argue that past performance does not guarantee future returns. Thus, Bitcoin may never match its decade-long performance of astronomical returns. Bitcoin has risen from $1 in February 2011 to approximately $70,000 now. Even if you invested in Bitcoin in November 2017, when it first traded about $7,000, you received a 10-fold return!
Does Bitcoin still have 10x upside? At over $70,000, that implies a $700,000 price target. Wall Street's price estimates may surprise you despite that high number. Many analysts and investors expect Bitcoin to reach $1 million by 2030. In 2022, Ark Invest's Cathie Wood proposed a $1 million price tag. Later, she boosted her price objective to $3.8 million.
For Bitcoin to appreciate that much, many things must happen. More mainstream adoption is needed. Institutional investors must increase crypto asset allocations. Crypto regulators must improve their framework. Blockchain developers must find new uses for it, and users must accept the digital coin as part of the global financial system.
From a broad perspective, I can see why so many investors in The Motley Fool's 2024 bitcoin investor survey were hesitant. There are many Bitcoin reasons to be positive. The debut of spot Bitcoin ETFs could be a turning point in crypto history if it leads to mainstream adoption.
I remain bullish due to Bitcoin's history and significant upside potential. To paraphrase Winston Churchill, Bitcoin is not dead or even approaching its conclusion. Just the end of the beginning.
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