Top Digital Currency to Consider Purchasing Prior to a Potential 15,000% Surge, Suggests Billionaire Michael Saylor from MicroStrategy
Cryptocurrency (BTC), specifically Bitcoin, is on a roll. From early September till November 12, this digital currency has surged more than 50%, hinting at a potential bull market in the offing.
What's driving this growth? Bitcoin's upward trend since its low in September has been significant, but its real explosion came post-election. During his campaign trail, President-elect Donald Trump expressed his desire to turn the U.S. into the "crypto capital of the world." While his policy details were scarce, many investors interpreted his statements as a sign of his favorable view towards Bitcoin and other cryptocurrencies, in contrast to the previous administration.
Just how high can Bitcoin go? Although no one can predict for certain, Michael Saylor, executive chairman of MicroStrategy, has suggested a potential gain of 15,000% by 2045, bringing its value up to $13 million. Is such a forecast realistic?
Saylor's Bitcoin bet
So, what's Saylor's financial stake in Bitcoin's price? Given statements about price targets, particularly those as bold as this one, it's essential to understand if the speaker has any vested interest. And Saylor does.
MicroStrategy started buying Bitcoin as part of its strategic shift in 2020. The company, initially a traditional enterprise software firm, believed in the potential of adding Bitcoin to its balance sheet, which it thought would benefit its shareholders. Over time, as its Bitcoin holdings grew, accumulation became the company's central strategy. Saylor envisions MicroStrategy as a future-oriented bank, aiming to hold the largest Bitcoin reserve in the world and lend it out to corporations and governments worldwide.
Most of MicroStrategy's Bitcoin purchases have been financed through debt. The company's success is directly tied to Bitcoin's performance. While Saylor may genuinely believe in Bitcoin, he has a financial incentive to see its price rise. A faltering Bitcoin could negatively impact MicroStrategy.
The unique value of Bitcoin
Let's consider why Bitcoin is valuable, and why Saylor sees it as the future. Bitcoin is valuable because it combines the best characteristics of several assets. Like gold, Bitcoin's value is deflationary, due to the finite amount that can be mined. Over time, its price is likely to appreciate if supply remains constant. This is unlike the dollar, which is engineered to lose value due to inflation.
Bitcoin also resembles gold in its lack of centralized control, issuance, or regulation. Its decentralized nature means that its value is determined by market supply and demand, which is resistant to manipulation by governments or central banks. For those worried about future hyperinflation, Bitcoin could potentially serve as a financial sanctuary.
However, Bitcoin superiority to gold lies in its ease of storage and exchange. Despite its valuation equal to the gold in Fort Knox (around $300 billion), Bitcoin can be stored on a USB drive and sent globally in a matter of minutes.
Bitcoin's legitimacy is on the rise
Once considered the Wild West, Bitcoin's market was shunned by most institutional investors. But times have changed, and protective institutions are now pouring capital into this space.
Research conducted by EY, one of the prominent global accounting firms, revealed that 60% of institutional investors had at least 1% of their portfolio invested in digital assets, with an overwhelming majority intending to increase their holdings.
Although this trend has been in motion for some time, the U.S. Securities and Exchange Commission's approval of spot Bitcoin ETFs in January is further spurring investment. ETFs offer enhanced liquidity, market stability, and easier access, all of which appeal to institutional investors.
Is Saylor's prediction realistic?
Achieving $13 million by 2045 is not unattainable, but I'm skeptical of its practicality. Saylor's prediction depends on institutional investors allotting an unprecedented portion of their portfolios to Bitcoin - much more than it currently represents in the global equities market.
Bitcoin's market share is currently a little over 1% of the equities market. If Saylor's prediction were to come true and equities continued to grow at their historical average, Bitcoin would need to account for 33% of the global equities market, causing a fundamental shift in global financial markets.
While such a drastic reordering seems improbable, Bitcoin would still be an attractive investment even if it reached only 5% of global equities, offering an annual return of over 18%. While no one can predict Bitcoin's exact trajectory, its potential to outperform the market appears bright.
Investors are closely watching Michael Saylor's financial investments in Bitcoin due to his bold predictions about its future value. As the executive chairman of MicroStrategy, Saylor has been heavily investing in Bitcoin, financing most of these purchases through debt.
Investors are also looking at the unique value proposition of Bitcoin, which combines the deflationary nature of gold with the ease of storage and exchange. Bitcoin's decentralized digital currency system provides it with resistance to manipulation by governments or central banks, making it an attractive option for those worried about future hyperinflation.
